Demand for IT specialists in Ukraine is bloated

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Ukraine’s major system integrators are downsizing due to the complicated situation in the country and deflation of the market. Part of the employees are being let go, a source at Incom told Capital. A representative of Incom’s press service specified that it was not mass downsizing, rather that certain positions were shifted to a shorter working schedule. For some positions, the work load was being re-distributed. The representative noted that changes are being made in the staff of structural subdivisions. “In every particular case, we consider all pros and cons,” the representative emphasized saying that the company is not yet ready to announce the final figures of downsizing because the interim results are currently being summed up.

Incom blames everything on the situation in the country. “A large number of our clients suspended, froze or postponed projects in the IT sector. Accordingly, the workload of specialists has decreased for the time being and in the foreseeable future,” says the company representative.

Not the first one

Interestingly, another large system integrator NVision Ukraine (former SITRONICS) was forced to downsize its staff at the end of the last year. Former director of the company Kateryna Chalaya decided then to leave the company, since Russian shareholders, as she said, set an impossible task: downsize the staff twice to 140 people and generate an annual profit of USD 130 mn from April 2013 to April 2014. The current director of the company Taras Kozak yesterday refused to comment on the current staff policy of NVision Ukraine.
Representative of NVision Group in Moscow Valeriya Voskresenskaya specified that staff changes at the end of last year were made due to the process of integration of SITRONICS and NVision Group and, primarily, the need to reduce dual functions. Now, NVision Group is considering its future strategy in Ukraine due to political events, she said.

No to the hardware market!

In Ukraine, NVision Group’s situation is similar to that of Incom. In 2013-2014 the company has not had such large-scale projects as the elections in 2012. The one billion hryvnia project on ensuring video surveillance at voting stations involved 7,000 specialists with 200 t of equipment assembled. System integrators can only now dream of such projects.

This year, the market of system integration shrunk compared to 2013. Indirect signs point to this fact. For instance, in the first quarter the supplies of servers to Ukraine amounted to USD 10.6 mn, which is 20% less than in the first quarter of 2013, according to IDC. Meanwhile, the supply of personal computers dropped 54% to 272,000. The sale and installation of different systems and hardware account for 90% of the domestic market in Ukraine. Incom and SITRONICS are the largest companies in system integration and consulting in the country. Their turnover in 2012 amounted to UAH 1.597 bn and UAH 1.6 bn respectively, according to the rating of Investgazeta.

Expenses had to be optimized and the orders mainly placed by the government sector also decreased, says Marketing Director BMS Consulting Natalia Poleno, the third largest system integrator, which showed profits in 2012 t the tune of UAH 689 mn. The staff, however, was left unchanged. “Yes, we are five times smaller than Incom. They have over 1,000 employees and we have around 200,” she said.

Divide in two

The forecasts of players on the domestic system integration market are rather unnerving. Most likely the sector will shrink by nearly 50% from USD 3.1 bn to USD 1.6 bn. The market began stagnating last year when the national budget did not envisage any allocations for the support of large-scale IT programs. This year, the political crisis aggravated the situation. System integrators failed to regain profits focusing on services instead of hardware as earlier. Conversely, the Ukrainian market of IT outsourcing, which mainly develops software for companies abroad, will increase by approximately 20% in terms of volumes of orders.