Serbia has swiftly become a preferred destination for technology firms and highly qualified professionals from Russia, a trend highlighted by The Wall Street Journal. While Turkey, the Emirates, and Georgia initially absorbed a large influx of Russians at the onset of the conflict, many chose Serbia instead.
In March 2022, Luxoft, an American company specializing in AI-driven software development for global giants like BMW and Volkswagen, as well as in banking, logistics, and telecommunications, relocated 1,000 engineers from Russia to Belgrade. Despite perceptions in the local market, these are predominantly Western firms, such as Luxoft, which closed their Russian offices due to sanctions, seeking a more favorable business environment.
Luxoft’s Belgrade offices in Airport City span two floors of a newly constructed building, with most employees currently working remotely. The company serves over 425 clients globally, including 74 Fortune 500 companies. Mihajlo Poštić, General Manager, discusses Luxoft’s two-year journey in Serbia amid IT sector challenges, Russian worker adaptation, and future plans with Forbes Serbia.
Dominance of Russian developers
Poštić notes Luxoft now employs 900 staff, with 80% relocated programmers and 20% Serbian hires. Serbia’s favorable conditions for hiring foreigners, coupled with cultural affinity, spurred Luxoft’s move. Initial meetings with Serbian government officials assured expedited processes for residence and work permits, although recent regulatory shifts have slowed these procedures.
Tax incentives for skilled foreign workers were crucial, mitigating cost competitiveness against neighboring countries like Bulgaria and Romania. Poštić highlights the formation of the Serbian IT Association to streamline collaboration with the government and address sector-wide issues, ensuring continued growth.
Russian workers’ adaptation and potential
Russian employees have integrated well into Serbian society, with many settling long-term, despite seasonal challenges like climate and pollution. Poštić acknowledges Russia’s technological prowess but emphasizes Serbian developers’ recognition and cooperative exchange.
Challenges and Outlook The IT sector’s growth in Serbia faces challenges from stabilizing demand and regulatory hurdles, especially in highly regulated sectors like banking. Poštić anticipates recovery by year-end, buoyed by ongoing state support for hiring foreign talent and the resilience of product development segments.
Navigating market realities
The absence of EU membership complicates business dealings, particularly in securing banking sector contracts, where EU compliance is increasingly pivotal. Poštić underscores the evolving landscape, requiring strategic adaptation amid shifting client preferences.
Luxoft’s resilience amidst sectoral crises underscores its commitment to Serbia’s tech ecosystem, poised for renewed growth as global conditions stabilize.
