“The Ukrainian IT industry in 2024 was going through difficult times, but it remains one of the key sectors of the country’s economy. What to expect next?”, — write: epravda.com.ua
IT is the second largest export industry, providing 38% of services exports in Ukraine. In the first half of 2024, its share was 11.6% ($6.4 billion) of total exports. Despite difficulties and a drop in export volumes (-4.6% in nine months of 2024), Ukrainian IT companies demonstrate adaptability, find new ways to attract customers and ways to enter new markets. Source: IT Research Ukraine 2024: sustainability as a new reality By 2022, the IT industry was experiencing a real boom. Clients willingly chose Ukraine as a service provider, and various sources called it the best country for IT outsourcing in Eastern Europe. Demand for digital solutions during covid set a precedent in the market, so Ukrainian IT flourished. A “candidate market” was formed and companies competed in an attempt to hire the necessary specialist.Advertisement: With the beginning of the war, everything changed. Foreign clients began to fear the high risks of doing business in Ukraine. Power outages, employee mobilization and war-related challenges are among the main concerns. Due to the loss of projects, Ukrainian IT companies faced massive layoffs. According to DOU, in the first six months of 2024, the 50 largest IT companies cut 2,400 jobs. employees or 2.9% of the total number of employees. This trend is observed all over the world. Technological giants – Intel, Tesla, Google, Meta – also announced layoffs. According to Layoffs.fyi, more than 130,000 jobs were cut in 2025. jobs in 457 companies.Advertisement: The main reasons for mass layoffs around the world are inflation and rising interest rates in the United States, economic uncertainty due to the US presidential election, the market’s return to pre-pandemic demand for digital solutions, and the rapid increase in the impact of AI on certain positions. Outlook for service companies The global economy is unstable and affects the demand for IT services. A gradual improvement is expected in 2025, but it is too early to talk about rapid growth. Shares of technology giants are rising. The “Magnificent Seven” (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla) provided more than 53% of the stock market’s returns. Wall Street expects the U.S. stock index to reach at least 6,500 by the end of 2025, representing a 9% price gain. Hiring will resume. The industry is coming out of a multi-year recession, and the mass will be replaced by high-quality, narrowly focused hiring. Demand for AI solutions is high. AI is already delivering business value in many industries, so many areas will need to apply AI, which will create additional demand for AI solutions in the second half of 2025. The economic prospects of the USA are positive. Trump’s proposals, including lower corporate taxes, easing regulations and introducing new tariffs, could boost corporate profits and spur economic growth. However, these moves also carry the risk of increasing inflationary pressures. What will happen to us? Ukrainian IT is part of the global market, but we have one critical moment that affects our market more than foreign players: war. Everything depends on the development of events in 2025, but in any case, you should not expect rapid growth of the industry. According to my colleague Andriy Yavorsky from GlobalLogic, the market will fall due to the lack of significant growth drivers. There will be no sudden collapse, but gradually, by 100-200 million dollars. for the quarter, IT exports will decrease. Read also: Tech giants cut employees. How else to prepare? There are 2 thousand in Ukraine. IT companies, 47% of which are outsourced. The main markets are the USA, Great Britain, Malta, Cyprus (the last two are used rather as offshore zones). We also work mostly with clients from the USA and Britain. At the beginning of 2022, we faced difficulties like most players in the market: the number of projects temporarily decreased by 10% due to the exit of several key customers. We minimized risks for clients: provided employees with alternative power sources, equipped the office with everything necessary for work during blackouts, joined “Diya.City” and now we can book employees. We successfully booked our first engineer last month. Part of our team (about 25%) works abroad. For some clients, this is critical, which is why we hire specialists in the EU. Of course, we always give preference to Ukrainians – this is one of our key values. Our financial growth in 2024 was about 15%. We avoided cuts: we kept the team and even grew by 14% since the beginning of the great war. The army is a new player in the domestic market. In part, the state provides itself with high-quality development thanks to mobilized IT specialists. During my service, I have seen many professionals join the military and create incredible projects such as Delta, “Reserve+”, “Army+”. The number of miltech startups that attract foreign investments, create jobs and build hardware and software ecosystems around them is increasing. AI is one of the main services in 2025. If you still do not invest in training specialists and implement AI in your processes, there is a risk of being left behind the main trend of the decade, and perhaps the whole century. Hiring will focus on specialists in narrowly focused fields: AI, cyber security, data analytics. Marketers and sales specialists will be needed. A return to pre-pandemic vacancies is out of the question. Conclusion Uncertainty is likely to be the word of 2025 due to geopolitical and economic changes. The outlook for the world is positive: stocks of tech giants are rising, hiring is recovering, demand for AI solutions will keep the industry afloat. The Ukrainian IT industry will most likely continue to gradually lose ground, but everything depends on the political trends in the country and the situation on the battlefield. Despite the decline in 2024, it is still a strong export-oriented industry that brings significant foreign exchange earnings to the country year after year. Despite all the circumstances, Ukrainian IT companies have learned to adapt quickly: we are looking for new customers, entering new markets, expanding the range of services. In 2024, I prepared 12 digests that we sent to clients every month. Each had an important reminder: “Support the Ukrainian army.” I adhere to this principle even now: support the Ukrainian army in any way.