Israeli Tech Firms Have Much to Lose in Ukraine

Computer programmer Peter Kolomiets, a Russian-speaking Israeli who is currently living in Kharkhov, Ukraine, is concerned. In recent days, people in the border city in the east of the country have stocked up with canned foods, toilet paper and some are planning to flee westwards to Kiev, or Poland, or even to East Asia. "When you see on TV, 100,000 Russian troops massing on the border, 30 minutes away from you, it's very stressful," he told "Globes."

Kolomiets said that Kharkhov's residents are divided between worried residents and business people, and tech entrepreneurs who feel sure that it's all just a muscle-flexing exercise by the Russians. Kharkhov is 42 kilometers from the Russian border but according to Kolomeits life is carrying on as usual and the restaurants and bars are full at night.

Kolomiets's software company IdeaSoft serves Israeli companies and he is eager to convey the 'business as usual' message, to calm both his employees and customers. As a former officer in the IDF's Dudevan commando unit, he says that he understands military conduct and the Russians would not want to invade heavily populated areas, where they would sustain major losses, as happened to them previously in Georgia.

In recent years Ukraine has become a type of proxy for Israel's tech sector, as companies struggle to hire staff. There are no official figures but IT outsourcing giant Ciklum VP Eran Cohen, who has been working with Israeli companies in Ukraine over the past 10 years, estimates that there are 15,000-17,000 employees there serving Israeli companies. This makes Ukraine a critical factor in the growth of Israel as a unicorn nation.

These employees divide up into several categories: those working for large outsourcing companies like Ciklum, Aman Group and Globalogic, which serve Israeli companies; workers employed directly by Israeli companies like Playtika, Plarium, Wix and MoonActive; and everything in between including freelancers, or those employed by hundreds of local outsourcing companies. Some 5,000 Ukrainians are employed directly by Israeli companies, according to conservative estimates, with gaming software company Playtika alone having 1,000 employees in Ukraine.

In Ukraine it is understood that these 17,000 employees of Israeli companies are in danger, although a distinction is made between cities like Kharkhov, Mariupol and Dnipro, which would likely be in the path of any potential Russian invasion, and cities closer to the Polish and Belarus borders like Kiev, Odessa, and Lvov, which are considered safer.

An analysis by "Globes'' on LinkedIn found that many Israeli companies are in the more dangerous eastern region including gaming software company Plarium, which has 816 developers living in Kharkhov. Other Israeli companies with development centers in Eastern Ukrainian cities are Playtika, Wix, and Fiverr.

British outsourcing company Ciklum, which has 900 employees in Dnipro and Kharkhov, has formed a detailed plan to respond to any crisis. Cohen, who is responsible for Ciklum's operations with Israeli companies, said, "We assessed the situation and charted four scenarios of different invasions and reached the conclusion that an invasion in the east is the most likely possibility. We have plans for business continuity and in an emergency situation, we will evacuate workers to an office in Gdansk in Poland. Our business continuity team, which is responsible for the subject at a corporate level, has been equipped with satellite telephones."

Peter Kolomiets, who manages projects in Ukraine for Israel's Aman Group, has also prepared a plan including assistance in evacuating workers and their families to Kiev, funding for hotel accommodation and food supplies brought ahead of time, as well as assistance with EU representatives in evacuating workers to Poland, if necessary, and buying satellite phones. "We have seen that the shutting down of the Internet is something that the Russians have repeatedly done," said Kolomiets.

Verbit, an Israeli unicorn with 30 employees in Ukraine, has also prepared a business continuity plan, which includes assistance in evacuating employees to Poland, the UK and Israel, and preparing employees for remote work, and paying salaries if the banking system in Ukraine is shut down and the economy disrupted. (JPost / VFI News)

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