Software Producers Leaving Russia
The Russian software developer Luxoft, part of the IBS IT holding group, announced yesterday that it had opened a development center in Ho Chi Minh City, Vietnam. This is a move away from the Russian habit of outsourcing to the CIS, Belarus, Ukraine and Kazakhstan in particular. Luxoft explained that Vietnam offers an attractively priced workforce, which costs 40-50 percent less than in Russia. Luxoft general director Dmitry Loshchinin said yesterday that the Vietnamese center would have a staff of about 50, which could grow to 200-300 people next year. Investment in the center is about $1 million, he added.
Russian-based Luxoft has offices in Ukraine, Canada, the United States, Great Britain, Germany and Switzerland. Its receipts in the last nine months of last year were $78.1 million, which represents growth of 61 percent over the same period of the previous year. The company expects receipts of $97 million for all of 2007 and EBITDA of $10 million.
A lack of personnel in Russia, leading to a dramatic jump in salaries, prompted Luxoft to open its Vietnamese center. “In Russia, the aggregate expenditure [salary, social taxes and organizational expenses] on a single employee is $1500,” Loshchinin noted. “In Vietnam, it is 40-50 percent less. That savings will allow us to compete effectively with Indian developers, with expenses being about the same.” He added that nonspecialized programming would be done in Vietnam on order. Banking software would continue to be produced in Luxoft's Moscow center, and software for hi-tech companies at the Luxoft St. Petersburg center. Luxoft employs 1500 programmers in Russia.
www.kommersant.com
All the Article in Russian as of Apr. 23, 2008
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