The volume of office space occupied by IT companies in Kyiv may decrease by 10-15% by the end of 2023, the head of the strategic consulting department of the UTG company Kostyantyn Oliynyk told the Interfax-Ukraine agency. “After 2008, IT companies were the most active tenants in the office segment of Kyiv, rapidly expanding the occupied space. At the same time, their attention was focused on professional business centers of class A and B. On average, they occupied more than 45% of the market, and in a number of business centers – all 100% of the space. However, now we see the opposite trend – a sharp reduction in the number of employees and, as a result, the necessary spaces. By the end of 2023, the release could be approximately 10-15% of the current volumes,” – Oliynyk said.

He noted that the reduction of the areas occupied by IT companies is a global trend, which is intensified by military conditions in our country. “After a rapid boom during the coronavirus pandemic, the rate of profit growth decreased, costs increased, IT companies slowed down their expansion and reassessed their development strategy – 229 companies in the world, including the largest IT giants (Microsoft, Apple, Google, Meta, Amazon, Snapchat, Twitter) cut 68,500 employees in January 2023, and more than 159,600 employees in 2022. The invasion of the occupying forces into Ukraine additionally provoked the slowdown of the world economy,” – he added.

As for Ukraine, our country is one of the world leaders in serving international TNCs with more than 5,000 companies. After the attack on Ukraine, about 13% of all IT personnel were relocated abroad, 16% of Ukrainian IT workers were left without work – according to the results of 2022, the number of people employed in the IT industry decreased by -5.3% and as of March 2023 amounted to 269,895 specialists. The results of the military year 2022 showed the stability of the IT sphere. Despite forced migration, massive attacks on the country’s energy infrastructure by the occupiers, unpredictable power outages, difficulties in attracting new customers, the export of IT services amounted to $3.71 billion, which is only -7.9% less than the pre-war volumes.

Oliynyk notes that in the industry as a whole, the increase in automation is leading to the fact that a number of professions are becoming less in demand, and almost half of the employees will need retraining in their basic qualifications. In the risk group – technical support specialists, big data analysts, software testers, typesetters, editors, typographers, proofreaders, text processors, translators, SMM, telemarketers, telephone sales operators, customer relations managers, bank employees, accountants, auditors, tax consultants, cashiers and store employees. “Most of the tasks of these professions can already be performed with high quality by neural networks today. Further development of ChatGPT, Midjourney and similar tools of the new era of artificial intelligence (AI) and machine learning will continue to facilitate and speed up work, provide more accurate data analysis, improve the quality of various tools and programs, automate processes, increase efficiency, and solve more complex tasks. The number of released labor resources and the office space they occupy among employees of IT companies will increase, and by the end of 2023 the release may amount to 15%,” – he says.

Oliynyk also expects a change in the geography of the selected locations. “Only representative offices of companies will remain in the central business district. Interest in business parks in other areas will increase. We expect the emergence of clusters next to metro stations, close to the suburbs,” – he said.

Source: Interfax Ukraine