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Bucks County firm EPAM has sided with Ukraine, and will stop serving Russian clients

Newtown-based EPAM Systems Inc. says it is discontinuing services to customers in Russia and will spend $100 million to support its 14,000 employees in Ukraine

EPAM Systems on March 4, 2022 said it would stop doing business with Russians.
EPAM Systems on March 4, 2022 said it would stop doing business with Russians.Read moreEPAM

EPAM, the Newtown-based software outsourcing firm that built a $4 billion yearly business largely with software professionals from across the former Soviet Union, has come off the fence and declared its support for Ukraine, where it has 14,000 workers.

The company’s founder and chief executive, Arkadiy Dobkin, was born in Belarus, where the government is allied with Russia. EPAM’s initial statement on Feb. 28 was studiously neutral, referring to the Russian invasion as “military actions in Ukraine.”

But in a statement Friday, EPAM announced “its full support of Ukraine and calls for the immediate end to the unlawful and unconscionable attack on the people of Ukraine.”

» READ MORE: This billion-dollar software firm in Newtown, Pa., employs thousands of engineers in Ukraine

”We will cease serving Russian clients,” David Straube, a spokesperson for the company, said Friday. He noted the cutoff “will not happen overnight,” and the company has “no timetable” for finishing ongoing work. “But it will be quickly.” The company had no comment on what will happen to its 6,000 staff in Russia.

EPAM also said it will commit $100 million to helping its employees and their families in Ukraine.

“What is happening in Ukraine is deeply personal for us. Our colleagues around the world are united in support” of EPAM’s Ukrainian staff and their families, added Dobkin in his statement.

The company also employs staff in Russia, its ally Belarus, and other former Soviet republics, as well as in Latin America and India.

A week before Russia attacked on Feb 24, Dobkin told investors that EPAM was shifting business away from the former Soviet republics. But he added that more than half of EPAM’s nearly $4 billion in yearly sales are still serviced from that region.

» READ MORE: EPAM shares fall again as Pa.-based software giant rushes to save its engineers caught in Ukraine invasion

He had hoped damage to the company’s business would be no worse than when Russia occupied parts of Ukraine in 2014. But Russia’s attack this time was on a much wider front, focusing on Ukraine’s major cities.

EPAM, which last year was added to the S&P 500 index of the biggest American companies, has seen its share value fall to around $200, from over $700 in early December, destroying more than $25 billion in market valuation. Investors feared that EPAM’s business would be disrupted, first by Russia’s warlike moves, and then by its invasion, now in its second week..

EPAM’s move was accompanied by a bright “We Stand With Ukraine” banner and a heart in the blue-and-yellow colors of the Ukrainian flag on the first page of its English-language web site. That led to its removal late Friday morning from a list of “Companies Supporting War” in Ukraine compiled by the Ukraine-based business-intelligence software firm Molfar, according to chief marketing officer Elena Petukhova.

EPAM had been listed, not with companies that directly support the war, but with a larger group of companies whose position was “nuanced.”

“Just learned that EPAM is closing offices in Russia. The company has been removed from the list,” Petukhova confirmed in an email Friday morning from Ukraine.

”The status of EPAM was ‘nuanced’ before today’s commitment because Dobkin in his earlier statements had ignored “the fact of Russia’s invasion of the territory of Ukraine,” Artem Starosiek, chief executive of Molfar, told The Inquirer. “You can’t be neutral right now.”

EPAM has 6,000 employees in Russia itself, Starosiek added. “There is no information about what will happen to them.”

In committing $100 million, EPAM is following other Ukrainian information technology companies that have “organized fund-raising for the army,” Starosiek said. EPAM’s commitment “is larger” than many others, he noted, “but corresponds to the size of the company.”

Also in Friday’s statement, EPAM confirmed that it “does not do work for the government in Russia,” and that it will comply with “all sanctions” against Russia.