Luxoft Holding Inc. (LXFT), a provider of computer services employing programmers in Russia and Ukraine, is set to move about 500 of them from the two countries after Western clients cited risks stemming from political tensions.
The relocations are part of a plan to eventually have no more than 20 percent of its workers in any one geographical region, Luxoft Chief Executive Officer Dmitry Loschinin said in a phone interview. Clients in the U.S. and Europe urged the company to reduce exposure to Ukraine and Russia, he said, declining to name the customers.
Luxoft has boosted sales by relying on relatively cheap programmers in Russia and Ukraine to provide services to clients including Deutsche Bank AG, UBS AG (UBSN) and Ford Motor Co. (F), helping its stock to more than double in U.S. trading in the six months after its June 2013 initial public offering. The stock plunged in February amid political turmoil in Ukraine.
The Zug, Switzerland-based company has about 7,500 workers, with 49 percent of them in Ukraine and 29 percent in Russia at the end of March. It may move programmers from the countries to Bulgaria, Poland and Romania, where it’s expanding offices and requires more expertise, Loschinin said. Luxoft may also add staff in Vietnam, which has strong engineering skills, he said.
“It’s all sentiment, there was no disruption in our operations,” Loschinin said. Luxoft already had plans to “rebalance” across countries, though it accelerated the project because of events in Ukraine, he said.
Luxoft has offices in three Ukrainian cities -- Kiev, Odessa and Dnipropetrovsk. Protests in Kiev led to the ouster of Russian-backed former President Viktor Yanukovych in February. In Odessa, more than 40 people died when pro-Russian separatists and supporters of Ukraine’s government clashed on May 2.
Epam Systems Inc. (EPAM), another provider of information-technology outsourcing services, said on May 1 it is expanding in countries including Poland to mitigate risks related to Ukraine. On April 30, Epam said it acquired Joint Technology Development Ltd. in Hong Kong to add offerings for the finance industry.
Shares of Epam, which dropped 30 percent from mid-February to late April, have rebounded more than 30 percent this month.
To contact the reporter on this story: Ilya Khrennikov in Moscow at firstname.lastname@example.org