Tech employers in Ukraine are getting ready for the worst, together with utilizing crypto in lieu of money

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Nadiya Semen starts every day at work in Lviv, Ukraine, monitoring the news, making sure emergency provisions are in place and generally hoping for the best.

She has withdrawn cash, read an emergency generator and stored food. Shelter maps are nearby. “Physically I feel safe. I do not expect rockets or tanks here, but psychologically it is hard,” she told MarketWatch. “Electrical and banking systems are down. There are bomb threats to schools.”

As one of 260 employees of online advice platform JustAnswer in Ukraine, the peril of an imminent Russian invasion and war has everyone on edge, said Semen, who lives in Lviv, which sits on the country’s western edge. And she has been through this drill before, taking courses in first aid and fire arms use in recent years, even though she is squeamish around guns.

“It is intense. It’s terrible. It’s scary,” JustAnswer Chief Executive Andy Kurtzig told MarketWatch. “This is my extended family. I love them.”

As tensions escalate toward Russia’s possible invasion of Ukraine, thousands of technology employees in the Eastern European country like Semen are bracing for the worst. Their employers, meanwhile, are putting in place contingency plans to protect them while maintaining operations in a key R&D region.

The most dramatic action came on Monday, Feb. 14, when cloud-services company Wix.com WIX, -2.55%,
one of Israel’s biggest employers in Ukraine, said it had evacuated most of its 1,000 employees and their families to Turkey for at least two weeks, with Wix picking up the tab for moving expenses.

App maker Canvas, which has about 30 contract employees near the Russia border in Kharkiv, has offered them the option of leaving the country for a month or temporarily relocate to western Ukraine, said CEO Kevin Stephens. Reaction has been mixed, with some workers preferring to stay put and others opting for Poland, where the language is similar to Ukraine, he said.

Kurtzig, like other executives contacted by MarketWatch, said he has worked on contingency plans for years because of the increasingly aggressive actions of Russian President Vladimir Putin.

In recent weeks, Kurtzig — who briefly lived in Ukraine with his family in 2019 — offered employees the option of relocating to the safer western border. He’s looked into paying their salaries in crypto since banks have been electronically shut down by cyberattacks. Ukraine officials blamed Russia after the online networks of Ukraine’s defense ministry and two banks were knocked offline Feb. 15. A Biden administration official on Friday blamed Russia for the cyberattack on banks.

On the systems side, JustAnswer is placing data backup on US servers, developing internet backup options with independent internet providers, establishing emergency satellite communications, and firing up backup diesel generators for power, among other moves in a country roughly the size of Texas.

What Kurtzig and others face is a potential debilitating blow to their workforces and businesses in a country that has been a vital resource for engineering talent, 3-D modeling and customer service.

“What attracts US tech companies besides Ukrainian talent is the fact that it is a fast growing digital economy. It ranks 37th out of 90 countries on our digital momentum measure,” Bhaskar Chakravorti, dean of global business at The Fletcher School, Tufts University, told MarketWatch.

The San Francisco-based JustAnswer employs about one-fourth of its 1,000 employees worldwide in Ukraine, mostly in the western cities Lviv and Uzhgorod, with others in capital city Kyiv. Most are engineers. JustAnswer, which has had a presence in the country since 2010, plans to add 180 people this year after hiring 87 in 2021.

Google parent Alphabet Inc. GOOGL, -1.61% GOOG, -1.39% snapped up CloudSimple, a cloud-solutions provider, in early 2000, establishing a de facto R&D facility in Ukraine. Snap Inc. SNAP, -3.65% did much the same when it completed its purchase of Ukrainian startup AI Factory.

They join Oracle Corp. ORCL, -1.27%,
Ring and Grammarly — all of whom have offices in Ukraine, employing hundreds.

Google declined comment. Oracle and Snap did not respond to email messages.

Indeed, despite the proactive actions of US tech companies to protect their workers and operations in Ukraine, they aren’t immune from some seriously compromised digital infrastructure in the country, security experts contend.

“Moving employees to Western Ukraine won’t keep you safe from cyberattacks. Russia has complete control Ukraine’s infrastructure,” Marco Bellin, CEO of Datacappy, told MarketWatch. “Ukraine is a testing ground for all of Russia’s cyber abilities to shut off electricity and water, disrupt banks, make trains crash.”

Yet tech companies are determined to hold firm in a country that has been under looming Russia pressure for at least eight years.

“We are committed to the region,” Kurtzig said.

Added Semen, director of JustAnswer’s international operations: “People say, ‘Why not leave?’ But it’s your home, your family, all your friends, your kids’ school.”

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