How We Said Goodbye To IT Country In 2022
- 26.12.2022, 9:13
Another wave of crisis engulfed the industry.
2022 is coming to an end. No one expected an easy year, and no one was mistaken. It is difficult to find bright events in its calendar, and it is not so easy to recall all the dark ones. Dev.by tried to comprehend the main thing.
IT in Belarus has long ceased to be a cozy, safe bubble — it floats in the stream of general cataclysms, being carried far beyond the borders of the country. Therefore, for IT specialists, as well as for everyone, the year was divided into two unequal parts: before February 24 and after.
Before February 24, there already were those familiar discussions, to leave or stay (and still stay or return), already familiar searches, arrests, sentences, leaving HTP for good by some companies, and emergence of new ones (strictly speaking, the last set is dated by the end of 2021). We marveled at the multidirectional trends in statistics: there were fewer new IT companies, more liquidated ones, the influx of foreign specialists to Belarus was fading, while the HTP was setting new records. As the referendum approached, the news “from beyond” added to the anxiety caused by the local agenda.
Those who refueled the tank in February turned out to be right — the world collapsed a few more floors.
IT workers were affected in different ways: those who already lived in Ukraine became refugees with blocked cards, those who worked in Belarus, the companies tried to urgently (even by charters) take them to other countries. Remember those wildly expensive and scarce tickets to visa-free countries and the prices for rent that have jumped there? Then the Belarusians got acquainted with new exotic locations, for example, Armenia and Uzbekistan (Georgia was mastered earlier). EPAM alone moved several hundred employees from Belarus and Russia to Tashkent. The experience, of course, is curious, but not the easiest.
For some, changing the country was the only way to keep a job: “the very center of Europe” has become an unacceptable location for many customers and investors.
What else do we remember about spring?
currency deficit and dollar 4 BYN each;
mass exodus of companies and services;
a stream of sanctions — against banks and not only;
problems with money transfers and cards abroad;
the Paysend scandal: due to exchange rate differences, the transfer service drove Belarusians into debt for thousands of euros;
queues for an apostille (which has risen in price by 10 times) for several months;
the furious issuance of PBH visas (their number exceeded the number of humanitarian visas);
paralysis of vfs global — it was possible to sign up for getting a Polish visa only through intermediaries (they have cured the system only now).
And also the “half-life” of Wargaming: the flagship of product development in Belarus fell into two parts. Manufacturers of “tanks” left the “battlefield”, taking some of the employees and the global brand to the West, leaving behind the Russian successor Lesta and a half-empty office in Shabany. Fans of the game also had to decide: either the collective-Western World of Tanks, or the homespun Tank World, period.
EPAM managed to get by with less radical solutions: fled Russia, relocated everyone possible, but still kept their office in Belarus. As long as there is hope.
Crisis slides
Around the same time, the IT job market collapsed (and is still unconscious), and IT companies froze hiring and began to cut staff. What was truncated in Belarus sprouted in neighboring (and not so) countries.
dev.by lost count trying to estimate the scale of the new wave of IT migration and add up the results with the previous ones. It was estimated that from 16 to 23 thousand IT specialists could leave Belarus in two years. Indirectly, the scale of migration can be judged by the statistics of layoffs and hiring. For 10 months, the net outflow of personnel from the IT industry was 14+ thousand people.
Another wave of crisis engulfed the industry. No more recruitments to the HTP were officially announced. However, this did not prevent the already established residents of the Park from setting a new quarterly tax record. Company executives say that here are the bonuses paid at the beginning of the year (including for relocation), and exchange rate fluctuations, and work for Belarus from other jurisdictions. The result is comforting, but short-lived. Already in the second quarter, taxes fell, and there were fewer residents. And then the Ministry of Taxes and Dues stopped publishing this data. And Belstat classified the information on the export of goods and services. The last thing we know about the export of computer services is that in three months it amounted to $766 million (+4% compared to the period of 2021). At the same time, in March, the growth of exports of IT services stopped.
The state, as best it could, took care of the “stable functioning of the economy”: it added a double rate of deductions to the HTP Fund to +4 percentage points of income tax. The second measure was still limited to one quarter, the first was extended until January 2025.
In order to contain the escape of business, shareholders “from unfriendly states” were forbidden to alienate shares in Belarusian legal entities, and then leave them. The “unfriendly” list includes EPAM, Wargaming, IBA Gomel Park and two more Homel IT companies (the region turned out to be bewitched). Wargaming, apparently, knew something as it managed to leave a few days before the ban.
There were also attempts to carry out friendly measures. For example, in March, the HTP administration prepared a project to change working conditions for IT companies (similar to Russian measures). They also introduced a deferment from conscription, and the return of income tax of 9%, and a moratorium on criminal cases of an economic nature. Residents added their proposals, and the government gave hope that everything will be fine by July. After that, the bill went missing.
But working remotely from abroad was officially whitewashed.
How it was for IT specialists
Hard. Both for those who left, and those who stayed. Some had to look for housing, arrange children in kindergartens and schools, learn the language, bother with registration and insurance, pay an increased communal fees for the left apartments in their homeland and look for a way to change their passport at the consulate, others hid the real location from the customer, looked for a new job and made excuses why they stayed at home. Both were vulnerable to sanctions and discrimination.
Even if your startup has been in Denmark for several years, like Vera Reshetina has, the state fund can stop financing it because of a Belarusian co-founder with a 5% share. And the Polish grant program, all the more so, can refuse a startup that has moved from Belarus. But where are they to Slush, who canceled the victory of Immigram due to ties with the Russian Federation. “Slush, you suck,” one of the startup investors, Mikita Mikado, reacted to the decision.
Our students in the Czech Republic also suffered: the local Ministry of Education recommended that universities limit the opportunities for students from Russia and Belarus to study in technical specialties, they say, this is technical assistance to sanctioned countries. However, universities made decisions on their own. Foreign banks began to tighten the requirements for the citizens of Belarus: even the support and hope of the Belarusians in Poland, the PKO bank, began to refuse to open an account for them. Luckily it passed quickly.
Both those who left and those who stayed slept badly, burned out, looked for iodine and stored canned food in case of the worst. And also, like >bViktar Khamenok, they felt that our armored train was flying somewhere in the wrong direction, and they asked for the support of the community.
Keep in mind that wages began to fall in Belarus in the summer, and it’s not only the national currency that has strengthened — salaries began to drop in dollars as well. Either the outflow of projects was the issue, or the fact that the share of juniors has sharply increased in the market: it’s just that seniors and middles were the first to relocate. And in Poland, since the spring, the dollar has been growing, and this also caused IT people suffering — salaries are often in zlotys. In general, no stability.
The fact that this was “stability” became clear at the end of September, with the announcement in the Russian Federation of that very “partial” mobilization. The mobilization impulse was transmitted across the transparent border to our IT specialists. The lucky PBH owners hastened their departure for fear of army subpoenas. Not without reason: before the end of the year, the Ministry of Defense promised to verify all those liable for military service.
Are we doomed?
By this time, the regional cataclysm in IT has already been fit in the framework of the global crisis: global companies are laying off employees, companies in Belarus are also closing offices and cutting staff (one, two, three, four, five). Everyone is waiting for a recession and discussing who will go under the knife first. Does it seem that everything is lost?
At least not this year. After all, it's already over. And the armored train, although rushing at full speed, still has not reached the end point. IT companies — in Belarus or along its perimeter — are battered, but alive, employees too, and everyone somehow works. And this is already an outstanding result by today's times.