Upwork Inc. announced March 7 that it is suspending business operations in Russia and Belarus. The move, which will fully take effect May 1, starts with the shutting down of support for new business generation in each country. The B2B talent platform also withdrew guidance, citing a decrease in talent activity in Ukraine, Russia and Belarus along with increased expenses for efforts to support team members in the region.
“Over the coming days, users in Russia and Belarus will no longer be able to sign up for new accounts, initiate contracts or be visible in search on Upwork’s work marketplace,” Upwork said in a regulatory filing. “Existing contracts with talent and clients in the region will remain open, with final billing due by May 1, 2022.”
Upwork noted approximately 10% of its team members were located in Ukraine, Russia and Belarus, including nearly one third of its engineering team. The Ukraine represented approximately 16% of Upwork’s engineering team while Russia and Belarus represented approximately 17% combined.
“We have undertaken extensive efforts to support our team members in the region, including financial and other forms of support and paying certain expenses for those team members seeking to relocate from the affected region,” according to the company. “We have already incurred or committed several million dollars of unplanned expenses, including a donation of $1 million to Direct Relief International to alleviate the humanitarian crisis in Ukraine, and expect to incur additional expenses as events unfold.”
Since the invasion, Upwork said it has seen a notable decrease in activity from talent in the region, particularly Ukraine. Upwork said approximately 10% of total revenue in 2021 was derived from work where either the talent or client was located in the region with Ukraine representing approximately 6% and Russia and Belarus representing approximately 4% combined. Nearly all revenue was derived from work performed by talent inside those countries for clients in other parts of the world.
Upwork said approximately 25% of client spend from its “web, mobile and software development” category in 2021 came from either talent or clients in the region with Ukraine representing 15% and Russia and Belarus representing approximately 10% combined.