Russia’s high-tech sector reels

After the first round of layoffs, the staff members of MeshNetics filtered in as usual, taking their positions inside powder-blue cubicles and making the ritual run to the cafeteria for coffee. On one level, they felt relief: The cuts had been made, and they were all still here. It made them especially glad to see one another.

But there were thoughts they kept to themselves. It was hard not to stare at the vacant desks, the stray objects one programmer described as the “signs of lost people.” On the wall, a flat-screen monitor with the caption “MeshNetics Confidential” flashed snapshots from the summer, when this start-up company seemed to have harnessed the best ambitions of a new Russia. Now, anxiety was disturbing the employees’ sleep. The smokers were smoking more often.

Above: The main office of MeshNetics in Moscow, which produces wireless networking systems and is facing a money crunch. (James Hill for The New York Times)

By Ellen Barry
International Herald Tribune

The tale of this young company, which produces innovative wireless networking systems, offers a glimpse of how the financial crisis has swept through Russia’s budding entrepreneurial culture and crashed like cold water onto young workers who had come to see the boom times as normal.

Last month, as Russia’s stock market swooned and the credit crunch took hold around the world, Russian companies spooked by memories of previous bank collapses scrambled to protect what cash they had. Venture capital dried up virtually overnight, including at MeshNetics’ parent company.

At MeshNetics, a gingerly layoff was followed by a second cut, and a third. By late October, the options had dwindled: it had to find a new source of capital or suspend operations. “It’s going to be tough letting go of this period of growth,” Ilya Bagrak, the company’s software product manager, said last month. He was still in shock from the experience of firing one of his employees hours after they had shared their morning coffee.

Read the rest:
http://www.iht.com/articles/2008/11/17/europe/17russia.php

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