LycosArmenia, an information technology and internet portal company operating inArmeniasince 2000 and the main subsidiary of Lycos Europe, has stated that it will be shutting down operations.  The shareholders of Lycos Europe, founded in theNetherlandsin 1997, have voted to either sell the company or liquidate the firm. Proof of this move is to be found in the financial reports of the company posted on its web site.

Lycos is known for being an internet portal whose services include web design, advertising, electronic shopping, internet chat, etc.  Over 700 specialists work for Lycos, now based in Germany, of which some 200 are employees of Lycos Armenia. The market for Lycos services is centered in Europe.

The office of Lycos Armenia in Yerevan refused to divulge any information on the closing but local employees, of which 150 are top professionals in the IT field, have already received news of the company’s closing.
For Mikayel Ghazaryan, a Lycos employee, the prospect of losing his job is the cause for major concern. “I, like many of my colleagues have taken out credit loans. Now, not only do we face the daunting task of finding new jobs but jobs that will pay a corresponding salary to that of Lycos,” states Mikayel.

The Armenian team at Lycos comprises approximately 3% of the total IT workforce in the country. According to ROA Ministry of Economy statistics there are some 5,000 specialist presently working in the sector in Armenia. Other sector representatives place the figure at 6,000. 

Zhenya Azizyan, who heads the Information Technologies Development Department at the Ministry of Economy states that the ministry is now engaged in finding new jobs for the soon to be unemployed specialists. “The best solution for us would be if we could reorganize the entire Lycos team within another company, in the same building, since they have coalesced as a team unit. Their work is computer related and even if every one of them found work elsewhere our primary aim is for them to continue as a team,” says Ms. Azizyan. The department will begin to take practical steps in this direction only after Lycos Europe ceases to be the official employer of the specialists.

The only issue of concern in the matter for Karen Vardanyan, Director of the Information Technologies Union in Armenia, is what to do in order that the Lycos professionals do not remain unemployed. “We want to locate businesspeople willing to make the necessary investments in order to keep the Lycos team, now out of work, together. Then too, the government can also have its share in the investments. This would really be hands-on assistance especially given that the Armenian Economics Ministry has expressed an interest in the matter,” suggests Mr. Vardanyan  who adds that if the issues involved aren’t to be solved on a concrete level then all such talk is just empty banter.
The initial official pronouncements regarding the economic crisis enveloping the globe and its impact on Armenia were intended to allay the fears of people and convince them that the crisis would pass Armenia by. Later on however, when the reality of the situation painted a much different picture, there was a flurry of pronouncements stating that Armenia could somehow benefit from the crisis. However, as Mr. Vardanyan asserts, the method to ‘take advantage’ hasn’t yet shown itself in the IT sector, even though the possibilities are numerous.

Mr. Vardanyan states, “We don’t possess the policy means to take advantage of the crisis.”
At the Ministry of the Economy officials insist that they are working on a package to ‘derive benefit’ from the crisis and that they will present it to the government within ten days. Over the weekend a meeting of industry leaders took place whose cooperation is vital for solving the issues at hand.

IT Development Department Head Zhenya  Azizyan states, “We had been preparing to come up with the specifics of developing the sector, but now we have other objectives whose realization is a priority and must be speeded up in order to salvage the situation and take advantage of the moment.”

In many of the countries negatively impacted by the crisis professionals working in this sector are losing their jobs. Many companies, in order to economize, are looking for other markets in which to invest in.

Karen Vardanyan states, “We have to think of ways in which to create new companies because there is the possibility of attracting new specialists to our market from other countries. Or else we have to devise the means to enter new markets because the well-known financial centers of the United States and Russia are being transferred overseas, to the Arab Emirates, Greece, Egypt and elsewhere.”

There are currently some 200 companies operating in the information technologies and communications sector inArmenia of which 60 are foreign firms.