eBay’s Magento business under threat from continuing Ukraine crisis
The ongoing crisis in Ukraine is threatening to destabilize the operations of Magento, an open-source content management system for e-commerce web sites owned by eBay and based in Kyiv (Kiev).
In its last quarterly report for the second quarter ending June 31, 2014, eBay noted that “The current situation in Ukraine and the Crimean peninsula, along with the response of the Russian and United States governments to this situation, have the potential to adversely affect our operations in Ukraine. In addition, many of our employees in Ukraine could be required to serve in the military for extended periods of time under emergency circumstances, which could disrupt our Magento business.”
Magento has strong links to Ukraine, with local developers playing a major role in its foundation in 2007. When eBay purchased Magento in 2011 for $180 million, it consolidated three offices to one headquarters in Kyiv, which runs the majority of the e-commerce logistics outsourcing business today.
The future will tell how Magento will react, should the situation in Ukraine worsen. Perhaps eBay’s subsidiary will follow in the footsteps of Russian software service provider Luxoft, which announced in June that it will transfer a part of its staff from Ukraine and Russia to other East European locations. Another potential destination is India, a location that was originally considered when eBay first bought the firm.