The Coder Supply Chain Runs Through Ukraine

(Bloomberg) -- The maps that connect Lyft Inc. customers with their nearest driver, the grammar software that tells you when to use “whom” instead of “who” and the targeting system that helps players of the newest Assassin's Creed video game aim a weapon, all owe a debt of gratitude to programmers in Ukraine. The country is among the largest exporters of information-technology services in Europe, known for its well-educated and affordable labor market.

There are roughly 250,000 technology professionals in the country. Russia's invasion of Ukraine imperils many of their lives. It has also disrupted projects at a raft of global tech companies and startups. Employers are now arranging escape plans for their workers in Ukraine and setting aside financial aid. Apple Inc. and Google have outposts there, as does France's Ubisoft Entertainment SA and Israel's Wix.com Ltd.

For many international companies, Vitaly Sedler is their envoy to Ukraine. Sedler started the outsourcing firm Intellias 20 years ago in the western city of Lviv. It employs about 2,000 engineers in Ukraine today. “Engineering talent in the country is very strong,” said Sedler. Coders make $3,000 to $4,000 a month, he says, far exceeding the national average but paltry by the standards of Silicon Valley or other Western cities.

Ukrainian code can be found almost anywhere in the world. It's on Wall Street (Citigroup Inc. and JPMorgan Chase & Co.) and in international banks (Barclays Plc, Credit Suisse Group AG, Deutsche Bank AG and UBS Group AG). It's in manufacturers of airplanes (Boeing Co.), cars (Daimler AG and BMW), mobile networks (BT), and phones (Samsung), said Anurag Srivastava, a London-based vice president at research firm Everest Group Inc. “Clients are anxiously asking how bad it's going to be, how long the crisis could last, and what action they should take,” he said. Everest isn't especially optimistic: It elevated the risk rating of doing business in Ukraine to high, from medium.

The conflict is already impacting work at companies that rely heavily on teams in Ukraine. Omio, a German travel search startup, has about 15% of its engineering workforce there. “I surely can anticipate a slowdown on certain projects,” said Tomas Vocetka, the chief technology officer. “The shortage of talent will increase in Europe.”

Ukraine's tech industry began to flourish after gaining independence in 1991, said Nataly Veremeeva, director of the local organization TechUkraine. It focused on outsourcing from the beginning, but in recent years has become more advanced and spun out an increasing number of start-ups. Ukraine-founded companies that do well tend not to stay, whether to pursue financial opportunities or talent pools elsewhere.

GitLab Inc., a computer code repository that went public on the Nasdaq in October, and Grammarly Inc., which makes a typing assistant recently valued by investors at $13 billion, each started in Ukraine before their global-minded leaders decamped for San Francisco. Nearly half of Grammarly's more than 600 employees are based in Ukraine, a spokeswoman said. “While we hope for the best, we have also prepared for the worst,” Brad Hoover, the chief executive officer, wrote in a Linkedin post.

Oleksii Shaldenko, a founder of the online video startup Wantent, awoke the morning of Feb. 24 to the sound of explosions. Wantent, which sells software to local and international broadcasters and streaming companies, is based in Kyiv, but many of its dozen or so employees had spent the last two weeks dispersed in other Ukrainian cities in anticipation of a Russian attack. Shaldenko spent part of that day searching for underground hideouts in the region with several members of his team. “One of the terrifying moments is checking the bomb shelter—terrifying because it's real now,” he said. Shaldenko has spent the past four days in one, he said: “I could not imagine that in the peacetime of 2022, war would come to our country.”