Ukraine as a cost-saving destination for tech companies

The IT sector has gradually become one of the most profitable and fast-growing in the US economy. An outstanding rise of 70% in the recent four years seems a moderate boost when compared with a 500% growth since 2012. It comes as no surprise that the United States is the home to the largest tech giants in the world such as Google, Apple, Amazon, Meta, Microsoft, Intel, and thousands of lesser but still impressive caliber, who daily push the world economy forward. 

With rising revenues comes rising costs, which for the first time in a decade may result in a profit decline. In the wake of macroeconomics pressure, the year 2023 would be a period of cost-cutting strategies for all major Big tech companies. The consequences of the COVID pandemic, the expected recession in the global economy, the rise of the Federal Reserve’s interest rate, and the War in Ukraine. All this, at least temporarily, halt the revenue and earnings growth, which the entire industry has used to in the last ten years of the rise in demand for digital products and services.

The latest meta-analysis from Layoffs.fyi reveals that in the course of the first two months of 2023, more than 100 000 tech professionals have been laid off. In fact, the process of tightening belts rose as a tendency in the second half of the previous year. As a result of the largest job cuts for US tech companies in years, more than 250 000 employees have been laid off since January 2022, with Microsoft, Meta, Amazon, and Alphabet being the largest cost cutters.  

2023 has already been called ‘the year of efficiency’, thus meaning further cost-saving measures to be taken, first of all by the US companies. In the end, those companies that can implement a cost-efficiency strategy will be the players who continue to perform with revenues. Recent research revealed one such means. American tech companies can save up to 30% of their operational costs by offshoring IT services to third countries such as Ukraine. A reliable tech partner and the vendor would help to save costs without disruption in operation or quality. 

How the industry has evolved in the past decade influenced the salaries. The wages in the IT sphere in the United States depend on the experience of working with a particular technology, employment history, adaptivity to stress, an ability to work in a team, and integrity. With a more detailed look, the IT market in the US has no shortage of specialists with 5+ years of work experience, who evidently have the highest wages. The average annual salary of a Senior developer is 120-150 thousand dollars with a high range of up to 220 000 dollars per year. 

Despite the uncertainty of the first two years after the outbreak of the Covid-19 pandemic, the demand for goods and services rose. In 2020-2021 the hunger for talent and the low level of tech unemployment resulted in a 6.9% salary increase, the highest figure in years. According to the 2021 research by DICE.COM, the statistic differed depending on the location in the United States, giving the most significant wage rise in Atlanta (13.9%), Washington (12.2%), Seattle (11.2%), and Miami (10.6%), thus even leaving Silicon Valley with its 5% in a tail. 

Rising demand for tech talents in the previous years and a willingness to pay more have not existed in a vacuum and toward 2022 the situation rose to a point where the level of wages was the maximum in the recent decade. 

• The highest-paid developers are considered to be proficient in Python. Their annual income can exceed 180 thousand dollars;

• They are followed by professional Ruby on Rails developers. Employers are ready to pay an average of 140-160 thousand dollars to such tech talents;

• Experts in the Javascript programming language can count on an average of $130,000 with the highest proposals up to 170 000$. 

• Java developers are also highly paid, their income is $125,000 on average;

• C++ and Automation QA experts close the top five, and their earnings range from 120-155 thousand dollars per year.