Tech CEO Defends Himself Against Employee Criticism That He Was Soft on Russia

(Bloomberg) -- Under fire from employees in Ukraine for not speaking out against Russia's invasion, the chief executive officer of a U.S. tech firm defended himself Thursday, saying he had to choose his words carefully to protect employees in region.

Epam Systems Inc., a Pennsylvania-based company with a large workforce in Ukraine, and its chief executive officer, Arkadiy Dobkin, had been criticized for failing to publicly condemn Russia and for not doing enough to support Ukraine's defense.

In an interview with Bloomberg News, Dobkin said he had been clear in internal town hall meetings that “Russian aggression” was to blame for the conflict. But he said that he had to be careful with his public statements as he does not want to jeopardize the safety of his employees based in Russia and Belarus.

“We are an international company,” he said. “When you make a statement you can endanger people in Belarus and Russia who could be arrested.”

“We are trying to work with this. We understand the emotions,” Dobkin said, adding, “It is difficult to navigate.”

Epam employs more than 58,000 people, with 14,000 of them in Ukraine and more than 18,000 staff in Belarus and Russia, according to company filings with the U.S. Securities and Exchange Commission. Epam's Russian operation accounts for about 2% to 3% of Epam's overall revenue and mostly works for Western clients, according to Dobkin.

Dobkin said the invasion of Ukraine would transform his company, though he said it wasn't yet clear how that would unfold.

“We know that we will be a very different company 12 months from now,” Dobkin said. “We have a significant employee base in the region, and we don't know what will happen. We are working on a transformation effort right now, but it's difficult because we don't know the level of transformation.”

He declined to comment on whether the company was weighing closing its Russian operation, “but we have a pretty broad number of alternatives on the table.”

Dobkin said his company was in the process of moving employees out of Ukraine into neighboring countries and had spent more than $50 million in the last six days relocating staff and supporting humanitarian efforts related to the conflict.

So far, the company has moved about 10% of its Ukrainian staff out of the country and has relocated hundreds more employees and their families to safer parts of Ukraine, an Epam spokeswoman said. Depending on the course the conflict takes, Dobkin that the company's workforce in the region could be “much smaller” in the aftermath.

“It is a big crisis, definitely,” he said. Dobkin was born in Belarus, obtained a degree from Belarusian National Technical University and started his first private software company in Minsk, according to the company's website and the Philadelphia Inquirer.

Dobkin reached out on Thursday after Bloomberg published an article detailing a backlash among employees and others to the company's position on Ukraine, and to a LinkedIn post by Dobkin that many criticized as being soft on Russia. Neither Dobkin nor an Epam representative responded to a request for comment on that article prior to its publication.

In addition to the internal tension, Epam's management has struggled with business pressures. On Monday, Epam plunged 46% after the company withdrew its first quarter and 2022 guidance, citing “heightened uncertainties” from Russia's invasion of Ukraine.

The tensions at Epam have unfolded as many other companies, including Apple Inc., Boeing Co., and BP Plc, have taken steps to curb business ties with Russia.

Mykola Klymenko is among the employees that criticized Dobkin, saying he is disappointed that the CEO hadn't taken a firmer stance against Russia. Klymenko said he is a lead software engineer at the company.

“He supports Ukraine but, at the same time, he doesn't want to blame Russia,” Klymenko said in a message to Bloomberg. “It's bad because Russians are doing horrible things, and I expected more from him. When all companies help the army and end business in Russia, he still tries to balance.”

A contract senior software engineer, Maksym Chernikov, said he had been blocked from accessing Epam's computer systems on Monday after sending out a companywide email calling for Epam's leadership to support a makeshift Ukrainian “cyber army” that is waging cyberattacks on Russian government agencies and corporations.

Chernikov gave management a deadline to respond. “Now time is not money, but lives,” he wrote in his email, which was reviewed by Bloomberg News. “After that, we will be forced to act on our own.”

Dobkin said he viewed the message as a violation of company rules and an effort to “blackmail” him into taking a certain course of action. He said he had since talked to Chernikov, whom he said he hasn't fired.

Chernikov confirmed that he talked to Dobkin on Wednesday but declined further comment.