Today, the world IT market is going through a period of decline. About 140,000 IT specialists lost their jobs, and this is only during the first quarter of the current year. Undoubtedly, such a trend is a wake-up call for the segment. We are observing significant downsizing in businesses of various scales. The wave of layoffs did not bypass the most powerful players, such as Amazon, Apple, Google, Meta, PayPal, Twitter, Zoom, Dell, Tesla, etc. These companies are well-known for their progressive position in the market, so the reduction of their employees clearly indicates that the crisis has already arrived.
According to experts, the flurry of layoffs is caused by the lulling of digitalization processes, which intensified a few years ago due to the Covid-19 pandemic. Obviously, advanced IT companies were not prepared for a decrease in demand for information systems and a rollback to the indicators of several years ago.
However, as you know, a crisis is always a time for new opportunities. In order to survive, the IT industry must not only adapt to changes but also find new creative solutions to overcome current challenges. Flexibility and innovation can help the IT industry recover effectively and gradually return to high performance.
Despite the difficulties, the Ukrainian IT market has its positives. First of all, we are talking about the development of such information technology areas as cyber security, artificial intelligence, and military tech.
In the field of the latter, successful developments are also noticed and publicized by world publications. It can be predicted that the direction of military tech will become a priority for Ukraine in the perspective of the coming years. Already today, startup projects can receive grants of up to $35,000 for relevant developments from the Ukrainian Startup Fund.
In general, in 2022, the export of computer services increased by 5.85% and amounted to approximately $7.3 billion. If we compare these indicators with the dynamics of the development of the IT industry from year to year, then the average growth was at the level of 27%.
Domestic IT companies reacted quite quickly to the situation in the country: they diversified risks by partially taking their business to new markets. If we talk about the domestic market, many international contracts have been called into question due to the fear of foreign customers continuing further cooperation with Ukrainian IT workers. Active mobilization, day and night hostile shelling of the territory of Ukraine by the aggressor country, and power outages do not add stability to the domestic IT market, and foreign companies are used to guarantees and are afraid to take risks.
Despite the difficulties mentioned above, the Ukrainian IT industry can still be attractive to international players. First of all, thanks to the possibility of global economic optimization. Let’s turn to the numbers, as always, they speak for themselves. According to the Glassdoor portal, the average salary of an IT developer in European countries is €50-60 thousand per year. In the leading countries in the development of the IT segment, for example, Great Britain, Germany, and Switzerland, experts in the IT industry can earn €70-80 thousand on average. At the same time, an IT developer from Ukraine is satisfied with €24,000 per year, and his expertise is not only not inferior to other global specialists, but may even be significantly higher. And if you take into account the fact that today 8 candidates apply for one vacancy in Ukraine, the Ukrainian IT market looks even more attractive.
It is obvious that international companies are unlikely to choose the strategy of replacing all their employees with Ukrainian specialists. But, for example, creating a back office in Ukraine is a rational and profitable solution.
It is interesting that the transition from outstaffing relations to the formation of its own team in Ukraine can save the company up to 60% of costs. At the same time, it will receive its own representation, direct management of the team and comprehensive provision of the business needs of the office.
Summing up, we note that today the opening of R&D offices in Ukraine or the partial transfer of development departments can provide tangible optimization to foreign companies.
Ukrainian IT workers not only adapted to work in military conditions but also became even more motivated to develop, study and gain professional experience.