Russia eyes pressure tactics to lure fleeing tech workers home

Russian President Vladimir Putin takes part in the opening ceremony of the Year of Teacher and Mentor, via video link in Moscow, Russia March 2, 2023. Sputnik/Mikhail Metzel/Pool via REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY.
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RIGA, Latvia - The bank worker logs into work each day around noon - 8 a.m. in Moscow - from his rental in Southeast Asia, where he enjoys tropical greenery, warm, humid air and, most important, more than 2,000 of miles of physical distance from the nearest Russian military enlistment office.

His employer, Sberbank, thinks he is home in the Russian capital, thanks to a reprogrammed router blinking in the corner, which always assigns his laptop a Russian IP address to trick the corporate systems.

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The bank worker, who is in his late-20s, is one of thousands of highly skilled workers who sought safer havens in response to the war in Ukraine, and whom Russia is trying to coax home with a mix of incentives and threats. More and more the emphasis is on the threats, including potential dismissal for unauthorized remote work abroad.

"There were cases when people accidentally logged into work apps with their real IP addresses, and they got detected, so you have to be very careful," the bank worker said, speaking on the condition of anonymity to avoid losing his job.

While the Kremlin seemed happy to see dissident artists, activists and journalists flee the country, the exodus of IT workers has become a major headache for top managers and officials as they struggle to fill key positions, keep the economy afloat, and prevent security breaches at companies that keep the country functioning despite the bite of Western sanctions.

Sberbank, for instance, is Russia's largest financial institution, holding roughly one-third of the country's bank assets. It was sanctioned by the United States and European Union shortly after President Vladimir Putin ordered the invasion last year.

Earlier in the war, the focus was on incentives, including lower income taxes and mortgage interest rates, which were offered to IT workers. But they failed to reverse the outflow, and the military mobilization announced by Putin in the fall to replenish Russia's depleted forces in Ukraine led thousands more fighting-age men to flee in a panic.

Many did not tell their employer that they were leaving, aiming instead to continue the pandemic-era work-from-home trend but from several time zones away.

Now, some of Russia's top employers, like Sberbank and other government-linked enterprises, are imposing a blanket ban on remote work from abroad and threatening to dismiss employees found to have left Russia.

Vkontakte, Russia's Facebook-like social network, has recently banned all remote work from outside the country, leaving employees with few options but to return or quit.

"VK is a Russian company," the company said in an internal memo shared with Russian state media and independent outlets. "And our products are largely tailored to the Russian market. It's important for us to be in the same context as our users and to understand their needs."

Yandex, Russia's answer to Google, has taken a softer approach. In May, a person close to Yandex said that the company was planning to create new foreign offices or expand existing ones to avoid a "brain drain" of top talent.

Ten months later, thousands of Yandex employees have left the country over the course of several emigration waves, and are working in new offices opened in Russian diaspora hubs: Serbia, Armenia, and, most recently, Turkey.

Yandex has been particularly shaken by Putin's decision to launch the war. As Western investors rushed to distance themselves from Russia, the IT giant's market value dropped almost overnight to less than $7 billion from about $20 billion. Its international projects face an uncertain future.

Once Russia's biggest internet success story, Yandex is now splitting its business into Russian and international entities to spare some departments from the fallout. It also sold its homepage and news aggregator, which served as primary news sources for tens of millions of Russians, to Kremlin-controlled VK following criticism of censoring news about the war.

For most of 2022, individual companies have sought to avoid government pressure by setting their own policies to retain workers. But recently, the Russian government signaled that it may take matters into its own hands, though there is no consensus on what to do.

After Putin made public comments calling Russians who left as "traitors" and "scum," senior officials have floated a variety of potential retaliatory measures, including stripping "unpatriotic" Russians of citizenship, designating them as foreign agents or seizing their property in Russia and giving it to soldiers.

The debate over how to retain, or reclaim, IT talent has ignited a feud between Russian members of parliament and the Ministry of Digital Development, with fierce Putin supporters clashing with more liberal-minded technocrats.

Senators such as Andrei Klishas, who long held top posts at Norilsk Nickel, the metals mining and smelting company, proposed in December to punish workers who continue to work for domestic employers remotely by adopting legislation that "would make being abroad less comfortable." Russia's Finance Ministry previously said it was considering a plan to raise the income tax for workers abroad to 30 percent from the 13 percent rate at home.

"Many of them ran away, but continue to work in Russian companies remotely, so can we change the law in this regard and limit schemes that allow people to work from abroad and receive money from here," Klishas said in an interview with Vedmosti, the Russian business newspaper. "Can we check if they pay all taxes? We can." He added that Russia should impose industry-wide bans on remote work from abroad by employees of "sensitive industries."

Andrei Isayev, a member of parliament from the governing United Russia Party, said that workers abroad pose potential security risks. "People who work, let's say, in transport organizations, finance, banking, they have access to corporate mail, to a customer database, and so on," Isayev said. "If they access them abroad, from unfriendly countries, then we understand our citizens may pay a big price."

Russia considers the United States, Canada, Britain and the entire European Union, among others, to be "unfriendly" countries.

Ministry officials, however, pushed back on the blanket ban, warning that such restrictions will only drive more IT workers to quit and leave Russian companies less competitive - unable to innovate or keep up with technological advancements.

"This will, of course, encourage them to take jobs in foreign companies and reduce the likelihood of them returning to our country," Maksut Shadayev, Russia's minister for digital development, recently told a government panel, adding that restrictions should be applied in cases of workers involved with state information systems under government contracts.

Klishas clapped back, criticizing the ministry for not doing enough to prevent data leaks "that have become almost the norm."

Shadayev estimated that by the end of 2022, about 10 percent of Russia's IT workforce had left the country, a figure that some experts said seemed low. "About 100,000 IT specialists are now outside our country," Shadayev said. "At the same time, 80 percent of them continue to work for Russian companies while in friendly countries."

Shadayev's ministry urged the government to exempt IT specialists from military mobilization and advocated for lower income tax rates. And in November, the ministry said that it was working on a "reverse relocation" plan, which, according to Kommersant business daily, would included offering prepaid flights home and deferrals from military conscription.

"They must understand that they have nothing to fear," Shadayev said.

In interviews, however, Russian IT workers said the efforts would likely prove futile no matter what path the authorities choose.

"My lawyer told me that [the military deferral] is a flimsy piece of paper and if the enlistment officer wants to, he will call you up anyway," the Sberbank employee said.

"It may come as a surprise, but when it comes to Sberbank, I've found that none of my colleagues support the war," the worker added. "So I think this is all pointless as it's much easier for us to get a job at a foreign company than come back and be drafted at any given moment."

A software engineer, who quit his job in Moscow and moved to the United Arab Emirates, said there was one surefire approach the Russian government could adopt: "The only thing they can do to bring us back is to stop the war."

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