Russian tech industry faces' brain drain' as workers flee

Russian tech industry faces’ brain drain’ as workers flee

In early March, days after Russia invaded Ukraine and cracked down on dissent at home, Konstantin Sinishin, a venture capitalist in Riga, Latvia, helped charter two planes from Russia to help people flee. Of.

Both planes took off from Moscow carrying technical staff from the Russian capital and St. Petersburg, Perm, Yekaterinburg, and other cities. Together, the planes ferried nearly 300 software developers, entrepreneurs, and other technology experts out of the country, including 30 Russian employees from startups backed by Sinishin.

The planes flew south across the Black Sea to Yerevan, the capital of Armenia, where thousands of other Russian technical workers fled in the weeks following the invasion. Thousands of people flew to Georgia, Turkey, the United Arab Emirates, and other countries that accept Russian citizens without visas.

As of 22 March, a Russian tech industry trade group estimated that between 50,000 and 70,000 tech workers had left the country and that an additional 70,000 to 100,000 would soon follow. They are part of a larger exodus of workers from Russia, but their departure could have an even more lasting impact on the country’s economy.

According to interviews with more than two dozen people who are part of a tight-knit community of Russian tech workers worldwide, including many who have left the country in recent weeks, the departure will fundamentally change the Russian tech industry. Gave. An industry once seen as a rising force in the Russian economy is losing vast swaths of its workforce. It is losing many bright young minds building companies for the future.

“Most Russian tech workers are part of the global market. Either they work for global companies, or they are tech entrepreneurs trying to build new companies for the global market,” Sinyshin said from his office in Riga. Said through an interpreter. “So they are leaving the country.”

The recent departure reverses a 10- to 15-year momentum in the Russian tech industry, which moved from Russia to the United States, said Konstantin Sonin, an economist at the University of Chicago’s Harris School of Public Policy. “It’s like the ’90s now, when anybody was able to move out of the country,” he said.

Technology is a small part of the Russian economy compared to the energy and metals industries, but it is growing rapidly. Economists said the departure of many young, educated, future-oriented people could have an economic impact in the coming years.

“The long-term impact may be more significant than the short-term impact,” said Barry Ickes, head of the economics department at Pennsylvania State University, specializing in the Russian economy. “Ultimately, Russia needs to diversify its economy from oil and gas and accelerate productivity growth. Tech was a natural way to do that.

Workers left the country because they objected to Russia’s invasion of Ukraine, no longer wanted to live under the Putin regime, and feared they could not speak their minds if they stayed. Working in technology, a comparatively lucrative industry, he had the money to flee the country. And like other tech workers globally, they can continue their work from anywhere with a laptop and an internet connection.

Others quit because their companies pulled them.

After foreign governments imposed sanctions on Russia and many American and European companies stopped selling products there or blocked access to banking and Internet services, some Russian tech workers didn’t have the tools they needed to do their jobs. Companies struggled to pay them.

Some worked for companies based in Russia, and others for companies headquartered elsewhere. Many startups in the United States and Europe – including many founded by Russian-born entrepreneurs – depended on software coders, engineers, and other technical staff in Russia. For Russian entrepreneurs living abroad, these workers were a known quantity and were not as expensive as specialists in Silicon Valley and other parts of the United States.

StudyFree, a San Francisco startup that helps students find university scholarships and grants, employs about 30 workers in Russia. Keeping them there has become a liability, so the company has let them out. Said Dasha Kroshkina, the Russian-born founder of

“If we still have employees in Russia, we won’t be able to attract as much money,” he said.

In March, a group that offered tips and other assistance to people moving to Yerevan from Russia on the Internet messaging app Telegram had more than 18,000 members. During the weekday, Russian tech workers filled coffee shops and other public places, according to several people who worked to find apartments through the Telegram group. When they jockeyed for places to stay, Rent prices increased significantly.

“We don’t have enough quality apartments for highly educated people with high salaries and standards,” said Aram Shahbandaryan, a former Google employee based in Yerevan, helping many Russians relocate to the city. “Yerevan is crumbling.”

Armenia’s Minister of Economy Vahan Kerobyan said in an interview that a country with strategic ties with Russia was not marketing itself as trying to drive companies out of Russia. Still, if companies chose to relocate, I decided it would serve to accommodate them.

“The Armenian tech community is providing assistance to its Russian friends, and the government is very concerned about giving Russian companies a good place that is not too expensive where they can operate,” he said. Kerobyan estimated that 43,000 people had moved to Armenia from Russia, half holding Russian passports and half holding Armenian passports.

Kerobian said Miro, an American software company, chartered flights for Russian employees to Yerevan and put them up in two hotels in the city’s heart. He said that x-Tensive, a software development company in Russia, has also moved its employees to the Armenian city as its primary customer, ServiceTitan, was set up there.

Miro has publicly stated that it is moving its employees out of Russia. X-Tensive did not respond to a request for comment.

Many of those workers may eventually move to other locations as visa restrictions require them to leave their homes after a certain number of days. Many people are still determining where they can go. Others plan to move to up-and-coming tech hubs such as Dubai, UAE, and Lisbon, Portugal.

Artem Taganov, the founder and CEO of a Russian startup called HintEd, said he knows of 70 founders of Russian companies who fled Armenia like him. If entrepreneurs live in Russia, he said, their companies can only serve the local market.

“Before all this started, Russia had such a strong technology base,” Taganov said. “Now we have a brain drain that will continue for the next five to 10 years.”

Russia has a tradition of producing talented software engineers and web developers. Notable companies like Telegram and Yandex have come from the country. As sanctions cut the country off from the global economy, tech companies must take cues from China. In this much larger country, businesses have successfully catered to domestic customers.

According to state media, the Russian government wants to keep tech workers in the country with lower tax rates, better mortgages, and even the promise that they won’t be drafted into the military. Last week, Russian Prime Minister Mikhail Mishustin called on Russian tech workers to create “our ecosystem.”

“The Motherland requires you to do your job,” Mishustin said in his annual address to parliament. “You will be able to work reliably and calmly for your company, for your country, earn normal money, and live comfortably here.”

Many will continue to work for state-affiliated companies in Russia. But they will have to face other hurdles.

They may have to rebuild many fundamental tools to construct modern software and internet services. Necessary computer hardware may become more challenging to find as sanctions limit availability.
Stepan Pachikov, considered by many to be one of Russia’s first successful tech entrepreneurs after he built Parascript, a company that made handwriting software for Apple machines, said that the smartest tech workers had been leaving the country for years but that the pace was accelerating.
As Pachikov has watched Russia become economically isolated from the world and more restrictive at home, he has little optimism about the future. “It’s devastating,” he said. “If you lose too much blood, it is death for the body. Russia has lost a lot of blood.”

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