The escalation of tensions between Russia and Ukraine and predictions that the situation could explode into all-out war in the coming days led Israeli high-tech firms and the personnel firms that work with them, which together employ 15,000 staffers in Ukraine, to prepare for the worst.
The companies had already made preparations to temporarily relocate employees and their families to safer areas within Ukraine (from the east and south to the west). There are also plans to move them to neighboring countries, such as Poland and Bulgaria, and to arrange alternative work spaces and satellite-based internet service in the event that regular internet access collapses.
Nevertheless, several industry sources have reported that at the moment, the vast majority of these Ukrainian employees prefer to stick with their standard work routines and are not interested in being moved.
A source at an Israeli company that employs several hundred employees in Eastern Ukraine – which is considered particularly vulnerable in the event of a Russian attack – said, “Despite the escalation, very few have agreed to temporarily leave the area. We ordered an airplane for the workers, which was to evacuate them to a neighboring country, but since just a few people showed up, the plane had to return to where it came from.”
“So far, ongoing work in Ukraine hasn’t been disrupted,” said the source, who asked not to be identified due to the sensitivity of the situation, “and we’re not seeing a drop in output despite the nonstop preoccupation with the tension. The cyberattack in the middle of [last] week was very limited. The Ukrainians are devoted to work and stick to it as part of the maintenance of normality. There is intense interaction with the folks in Israel and that’s how they pass the day.
“Despite that, it’s clear that Israeli high-tech firms are suffering damage and now the companies are looking for other sources for staff, outside of Ukraine. Over the past nine years, an amazing ecosystem has been built in Ukraine that serves Israeli companies, and it won’t be easy to find a substitute for it, but there may be no choice.”
An Israeli high-tech firm that has a staff of about 50 in Ukraine, mostly in the west, also reported that the workers didn’t take up the offer to relocate to a neighboring country. “It appears that the cow wants to give more milk than the calf wants to drink,” one senior executive quipped.
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“We quietly clarified whether the workers wanted to evacuate,” said another company, which directly employees about 20 people in Ukraine. “They viewed the question as a bit strange – ‘If there had been tension in Israel now, would you have evacuated?’ We conveyed a message that we would be happy to know if there was any way [for us] to help, with a cash grant, moving their families, etc., but so far – nothing.”
A handful of companies, including Papaya Global, have considered temporarily bringing their developers from Ukraine to Israel, but, in the cases of Papaya Global, it was met with a lack of cooperation on the part of the Israeli authorities. Eynat Ghez, the CEO of the company, which has about 40 employees in Ukraine, said, “We wanted to bring the workers and their families here and to find them an immediate solution. At the [Israeli] Health Ministry, they demanded that they wait 14 days after they receive a [COVID] booster shot, and at the Interior Ministry, they were concerned that they would apply for political asylum.”
But for his part, a source at another high-tech firm that was in touch with the Israeli authorities on the issue said, “In the government, they were actually attentive and had several conversations with us on the subject. There’s sensitivity regarding this at the diplomatic level, but it’s possible that if the companies had insisted on bringing over developers, [the authorities] would have at least considered the matter. Nevertheless, the high cost of living in Israel and the fact that in any event, most of the workers don’t want to come here led the matter to be dropped. Most of the companies are not interested in this.”
Ukraine may break off diplomatic relations with Russia after Moscow's decision to recognise two regions of eastern Ukraine as independent, President Volodymyr Zelenskyy said at a briefing on Tuesday.
Zelenskyy said he was weighing a request from his foreign ministry to break off ties. He also urged Ukraine's allies not to wait for a further escalation to impose sanctions, which should include shutting down the Russian-led Nord Stream 2 gas pipeline.
Zelenskyy played down the prospect of a large scale conflict with Russia but said he was prepared to introduce martial law if that happened.
“The engineers and developers residing in Ukraine tell of real fear. Some workers just get up and leave, and there is concern that the internet will fall and teams won’t be able to keep working” – said Cyril Simon, CEO of Stanga, a ONE technology Software company, which has decided to host Israeli firms’ development teams in an off-shore model at its offices in Sofia, Bulgaria.
Stanga will provide the arriving hi-tech workers fully equipped offices, gear, stable and secured infrastructures, and will help them to quickly obtain work permits from the Bulgarian government. This, in an attempt to help companies in the region reduce the professional damage and carry on with the business despite the tensions.
Stanga has been operation a large off-shore center in Sofia, and specializes in creating organic teams to manage development projects and digital transformation according to client needs. Stanga employs over 300 workers and serves over 40 large, global organizations, a third of them Israeli companies. Among Stanga’s clients are Dalet, Il Makiage, Limehome Molson, HSBC, H&M, Daimler, BMW, Wynd, Neutra, Allot, TEOCO, AIDG, Medix, Coors, and Lucid Motors.
According to Simon, “as many Israeli firms rely on entire developer and engineer teams in Ukraine, we offer them a way to maintain business continuity through a safe, stable, and nearby off-shore. We are prepared to receive entire teams from Ukraine at our Bulgarian offices, and to support Israeli firms in this way – both in terms of infrastructure and European regulation and quick response with the Bulgarian government and issuing work permits.”
The ONE group offers its business clients off-shore services in Ukraine as well, through cooperation with the Eastern Peak company, which employs 250 software developers and engineers in the city of Kharkiv, providing services to hi-tech company, 40 percent of which are Israeli.
Reuters contributed background to this report