An employee of a Silicon Valley company Waverley working in the Kharkiv, Ukraine office before the war began.Supplied/Supplied
Like many Silicon Valley executives, Matt Brown could not resist setting up shop in Ukraine. Its software developers were young and talented, spoke English and were exceedingly cheap by U.S. standards. There was nothing not to like.
In 2012, the year after he visited Ukraine for the first time, he set up an office in Kharkiv, in the country’s northeast. The company he founded in 1991, Waverley Software Inc. of Palo Alto, Calif., would eventually employ almost two-thirds of its 360 workers in Ukraine. One of the products the Ukrainian team worked on, the Jibo social robot, made the cover of Time magazine in 2017.
In October, 2021, Mr. Brown, a software engineer who specialized in tech startups, feared that Waverley’s good run in Ukraine was about to end. That month, the first U.S. news reports, based on intelligence sources and satellite imagery, revealed that Russian President Vladimir Putin was amassing tens of thousands of troops along his country’s border with Ukraine.
Mr. Brown went into a low-grade panic and asked his employees to make escape plans, since Kharkiv is only 35 kilometres from the border. He thought that Ukraine’s second-largest city, with a population of 1.5 million, would fall quickly if Mr. Putin were to launch an invasion.
He was ignored. “Almost nobody listened to me,” the 57-year-old said in an interview. “And we couldn’t force anyone to leave. Some thought that Putin was just bluffing. Others thought the Ukrainian military was very strong and that Putin wouldn’t risk an invasion. Some could not leave for personal reasons, like having to take care of elderly parents.”
He became exasperated as the troop buildup continued through Christmas and into the new year. He continued to plead with his employees to leave Kharkiv and other parts of eastern Ukraine.
“It took the bombing to convince them to go,” he said, referring to the start of the invasion on Feb. 24 and the destruction of much of the city’s critical infrastructure in the following weeks.
“Even then, we had one employee, Natalie, who did not want to leave Kharkiv,” he said. “She finally left about a month ago, went to Albania. The day after she left, her building was targeted by a Russian missile, and we believe her life would have been at risk if she had stayed there.”
Since then, Mr. Brown and his senior team have been trying to save their Ukrainian employees – and the company itself. They are monitoring their every movement to ensure they are safe as they leave areas under attack. The company is subsidizing their relocation costs, and some of Waverley’s clients have even offered to pay extra to help the Ukrainian employees stock up on supplies such as food and fuel, even pet food, as they evacuate to western Ukraine and sometimes to other countries.
None of Waverley’s 192 Ukrainian employees have been killed or wounded, but at least eight are in what Mr. Brown considers “danger zones” – Kharkiv and elsewhere in the eastern and southern parts of the country.
About a quarter of the employees have managed to leave Ukraine. Most of the others cannot, as males between the ages of 18 and 60 face possible conscription and must remain in the country.
On Monday night, Russia launched an offensive to seize the Donbas region in the southeast, the country’s old coal- and steel-producing area, parts of which are controlled by Moscow-backed separatist groups. It also sent long-range missiles into western Ukraine, hitting Lviv, where many of Waverley’s employees have retreated – proving that no part of the country is safe.
Even though about 95 per cent of Waverley’s employees in Ukraine are still working – a few of the young men were drafted – the company knows its experience in Ukraine has exposed the risks of globalization.
Waverley certainly wasn’t alone in its outsourcing drive. Hundreds of U.S., Canadian and European tech companies, big and small, have hired thousands of employees in Ukraine and elsewhere in Eastern Europe, turning cities such as Lviv and Kharkiv and Tbilisi, in Georgia, into little Silicon Valleys.
The trend started in the 1990s and accelerated in later decades. Western tech companies were attracted by the high number of young people with math and physics degrees looking for jobs in software development. They were talented but they were also bargains, happy to work for about a third of what a comparable California worker would make.
Samsung, Oracle, Microsoft and EPAM were among the tech heavyweights to build teams in Ukraine. Gartner, an IT research firm, recently estimated that more than a million IT professionals work in Ukraine, Belarus and Russia. Some Ukrainian entrepreneurs became exceedingly wealthy. WhatsApp co-founder and former CEO Jan Koum is from Kyiv, as is Max Levchin, a co-founder of PayPal.
In the weeks leading up to the war, Mr. Brown and Eugene Bogatyriov, 46, Waverley’s Ukrainian-born European general manager and vice-president of engineering, had all but given up on convincing the employees to leave eastern Ukraine. “They would not accept any command-and-control style of management,” Mr. Bogatyriov said.
But Mr. Brown and Mr. Bogatyriov still took precautions. They essentially ordered five “critical” team leaders to leave Kharkiv. Four of them did, and the fifth left the company. At the same time, they opened an office in Romania, partly at the urging of one big client.
When the war started and Kharkiv was pounded by Russian forces, the employees no longer needed to be convinced to bolt. “When people woke up to the sounds of air-raid sirens and explosions, some left immediately,” Mr. Bogatyriov said. “Some others needed to see a little more danger before going. One of our employees was working in the basement of his building and told us that he had two 300s in the building, which is the old Soviet military term for the transportation of wounded personnel.”
The company built a Google-based system to track and communicate with the employees. With Kharkiv now under near-constant shelling, Waverley is worried about the eight employees who stayed behind. Five are in the city; three are in the south of the country. They all had personal reasons for staying. One works as a volunteer for an aid charity and could not abandon people in need.
The company has no idea how long the war will last and whether its employees can stay safe. But Mr. Brown says he will not abandon the country when the war ends out of sheer admiration for his workers. “I wish more of the Ukraine team had taken me seriously before the war started,” he said. “But they are brave and resilient, and I am honoured to be working with them. We will stick with them in Ukraine.”