Can EPAM Regain its Momentum?
The Russian invasion of Ukraine impacted EPAM in many ways. It forced the company to rethink its delivery network away from its historical locations in Ukraine, Belarus, and Russia. The war was almost concurrent with the 2023-25 market slowdown. EPAM suddenly faced revenue erosion and low profitability, moving away from its previous high-growth profile.
India is EPAM’s number one delivery geography
EPAM accelerated its delivery network transformation after the 2022 Russian invasion of Ukraine. The company hired massively in India, reaching 10,000 employees at the end of 2024. India is now the company’s number one delivery geography, equating its historical presence in Ukraine/Belarus. EPAM also built out its presence in Latin America, almost doubling its headcount in the region with the acquisition of Neoris, a Mexico-headquartered IT services provider.
EPAM suffers from its focus on discretionary spending
From its inception, EPAM focused on innovation, winning small to midsize build services contracts. The company intentionally did not address run services to avoid price pressure and deliver complex projects. This discretionary spending profile, along with a heavy reliance on the T&M pricing model, strongly impacted EPAM during 2023-25.
With its planned expansion plants in India, EPAM will lose its differentiation
The company risks becoming a me-too IT services provider competing with Indian giants such as TCS, Cognizant, and Infosys.
Conclusion
EPAM is undergoing a significant transformation, starting with its delivery network. The adoption of the Indian model impacts the firm well beyond its delivery network. It positions EPAM in a new competitive landscape with tier-one Indian IT service providers having much easier access to talent than EPAM. EPAM will also need to rethink its identity and what it brings that the Indians don’t.
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