Microchip World Leader Curtails In Minsk Due To Sanctions
- 12.12.2022, 19:12
The employees are being relocated.
The office of the South Korean company SK Hynix, which is one of the top 3 world manufacturers of semiconductors and top 5 manufacturers of RAM, can be closed in Minsk, devby.io reports.
The work of the company is limited due to sanctions, the team is relocated to Poland. Those refusing to relocate may be fired. Several employees of SK Hynix Memory Solutions Eastern Europe (until 2018 — Softeq Flash Solutions) told about this to devby.io on the terms of anonymity. The company is giving no comment.
Before the war in Ukraine, the Minsk office of SK Hynix employed more than 200 people. The size of the team, which is now in Belarus, is unknown.
“Since summer about 100 people relocated to Poland. Some of the employees left for other companies, although SK Hynix never had a turnover before, as the conditions in Belarus in terms of salary were higher than the market. Some people are tired of not having cool projects. Due to sanctions from the United States and South Korea, we completely lacked communication and access to resources and servers located outside Minsk. Even licenses for different IDEs and tools could not be purchased for the Minsk office. Someone left because of uncertainty,” the employees say.
Initially, it was assumed that the remaining specialists would work on internal projects. Then, according to interlocutors, the concept changed. The company reported that those who refuse to relocate to Poland without a valid reason (unresolved issues with the military enlistment office, illness, no visa, etc.), will be dismissed, or such specialists will work under deteriorated conditions — their salaries will be reduced, and they will be obliged to go to the office. The decision had to be made before the end of November.
“In 2023, the Minsk office is going to be closed. So far, it is working, but the lease area was reduced. There are engineers in the team, however, they do not work on good and cutting-edge projects. About a half of team remained, no new specialists are being hired,” the interlocutor reported.
Where do they offer to move, and under what conditions?
Back in the spring, the company announced plans for relocation to Gdansk and employment in another company — Solidigm. This is a subsidiary of SK Hynix, which was created as a result of a deal with Intel.
In the autumn of 2020, SK Hynix agreed to purchase Intel's NAND memory chip business. The deal is worth $9 billion. In January 2021, the first phase of sale was completed (the final stage of the transaction is planned to take place in March 2025). At the same time, SK Hynix announced the launch of its subsidiary Solidigm.
In September of this year, Solidigm opened the first operating center in Gdansk, Poland. Until the end of this year, the company planned to open an office in Gdansk in Alpha Airport City.
But, according to employees, exact terms aren't known yet.
“They promised an office since new year, but there has been no clarifying information in this regard recently. There was information that not all Polish specialists will have enough space in the office, not to mention the relocants. We're still working remotely. The amount of work has increased significantly, but there are no employees.”
It is not known whether the Polish office will continue to grow at the expense of new relocants from Belarus. Many SK Hynix specialists refused to move to Poland, including due to relocation conditions.
Employees' opinions on the relocate program were divided.
“You resign ahead of schedule — you pay back the costs of the relocate”
The cost of relocation per employee is estimated at up to $35,000 (the figure was voiced by three speakers). It includes:
4 thousand dollars — relocate bonus;
10 thousand dollars — for transportation of luggage;
the cost of the service for finding a permanent apartment (up to 4 days of work of a realtor);
the cost of renting temporary housing for up to 60 days;
assistance in filing a tax declaration for 2022.
“On your hands, you get 14 thousand dollars (bonus+money for transportation of luggage). The remaining services are performed by contractors. The company specially hired by SK Hynix controls the entire process and pays for the work of contractors. Questions still arise though. For example, one of the colleagues, according to him, exhausted 4 days of the realtor services, and he was offered to extend this service for 850 euros per day. It is very expensive. If the employee worked less than two years (730 days) and decided to resign, he/she will have to reimburse all the costs of moving together with taxes, which the company will pay during the relocation process. The reimbursement will be calculated on the basis of time worked. The more days you've worked, the less you'll have to return. In fact, you can't refuse a relocation service. The contract stipulates that we are relocated by a certain company, and in case of early dismissal, we will need to pay everything to it (one of the interlocutors claims that you can refuse bonuses — edit.), shared another interlocutor.
“The company helped with visas, registration, tax support and search for housing in Poland. Offered a good relocation package. On average, wages were raised by 10 to 15 percent in comparison with those in Minsk. However, due to taxes net on hands comes less, but at the expense of different bonuses these losses are compensated. It is possible to consider that we didn't lose anything in terms of money,” another employee told.
“The Polish salary was calculated on the basis of the Belarusian salary, increased by 10 or 15% (depending on the position), and the exchange rate of the zloty to the dollar. Almost everyone moved from August to November, then the zloty rate reached 5. But in fact, the salary was calculated at a less favorable rate. Taking into account the high taxes (32%), wages in Poland decreased compared to Belarus. The company tried to compensate for this with a sign in bonus, but it still does not cover the fall in wages,” one more interlocutor told Devby.io.
Devby.io contacted the company, as well as the CEO of the Minsk office, for comments, but did not receive any answers.
SK Hynix is one of the top 3 global semiconductor manufacturers and specializes in the production of solutions based on semiconductor memory such as DRAM and NAND Flash, as well as CMOS sensors.
The Belarusian division of SK Hynix was opened in 2014. The company is engaged in firmware development and verification of SSD controllers and mobile device drives. Solutions are used in the products of global companies and industry leaders. CEO of the company Natallia Ryzhankova is the wife of Maksim Ryzhankou, the first deputy head of Lukashenka’s administration.
In early March, it became known that the United States would impose restrictions on the import of technologies to Belarus. Previously, such restrictions were imposed on Russia due to the war in Ukraine. Microelectronics, sensors, lasers, navigation systems, as well as telecom equipment got under sanction. It was assumed that the restrictions would apply to products made not only in the United States, but also those produced in other countries with the participation of American technologies.
Following the US, the EU also introduced new restrictions on the import of technologies into Belarus in early March. Advanced technologies proved to be under the sanctions, including computers, electronics, telecommunication equipment, sensors and lasers.
At the end of March South Korea also introduced limitations for the export into Belarus' and Russia of 57 nonstrategic goods and technologies. In particular, semiconductors and computer equipment were subject to sanctions. Korean companies interested in exporting goods from the list must undergo a separate approval procedure.