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India to gain as global tech firms exit Russia

Many technology companies including Accenture and DXC Technology, consulting majors EY, KPMG and PwC, top-4 consulting firms and a host of other technology giants have left Russia after the US and EU imposed sanctions

Microsoft, Alphabet, IT services, Ukraine, Technology
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Microsoft, Alphabet, IT services, Ukraine, Technology

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Business Shift

- Accenture had 2,300 employees in Russia

- DXC Technology had 4,000 employees

- Microsoft, Alphabet (parent company of Google) already announced plans to exit Russia

- Russia indicated nationalisation of operations of those leaving the country in order to protect workers from job losses

Bengaluru: Technology companies are leaving Russia in droves post the country's armed forces invaded Ukraine, creating a vacuum which can be cashed in by technology companies of India, and China.

Though given the fluid environment, these outsourcing works may not be available for execution as of now, sources in the know said that eventually, Russia may opt for sustainable execution through neutral companies.

"Currently, many technology companies including Accenture, the top four consulting firms and a host of other technology giants have left Russia after the US and EU imposed sanctions. Given the brand risks, they have to leave.

Eventually, some of this work may come to Indian service providers operating in IT services, consulting and SaaS companies," said Pareekh Jain, an IT outsourcing advisor and Founder of Pareekh Consulting.

In the last fortnight, a host of technology companies have shut down their offices against Russia's decision to invade Ukraine. Among IT services major, Accenture and DXC Technology have decided to exit Russia.

Accenture has around 2,300 members of staff employed in Russia, including its marketing services division Accenture Interactive where it has worked with Unilever, Avianca and Radisson Hotels.

"We have approximately 4,000 colleagues in Russia and are supporting them in this time of need. We continue to support and maintain rigorous compliance with all applicable sanctions levied against Russia," DXC Technology said in a filing announcing its stand on leaving the Russian market soon.

Similarly, consulting majors like EY, KPMG and PwC have also announced their exit from the Russian market. These companies not only provide accounting-related services, but also offer consulting services to businesses in their digital transformation journey.

Earlier, Microsoft and Alphabet (parent company of Google) had decided to exit the Russian market.

Meanwhile, Russia has indicated that it may nationalise the operations of many of the operations of those leaving the country in order to protect workers from job losses. Statements also indicate that the country may not allow many of those firms to start operating in the country after sanctions are lifted in the future.

"Much of the high-end technology work will be outsourced to companies that are willing to operate in this geography. This will ensure continuity of operations and help Russia in restricting brain drain in the light of punitive sanctions. Of course, many of these things will happen silently now without much publicity given the external environment," another source said.

Given the brand risks, they have to leave. Eventually, some of this work may come to Indian service providers operating in IT services, consulting and SaaS companies

- Pareekh Jain, an IT outsourcing advisor and Founder of Pareekh Consulting

Debasis Mohapatra
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