Valuable investor chooses India, leaves Lithuania

After British bank Barclays moved its IT operations to India, the Lithuanian government had to come to terms with the volatility of foreign investment.

Daiva Repeckaite
Daiva Repeckaite NewsMavens, Lithuania
Valuable investor chooses India, leaves Lithuania - NewsMavens
IT worker, PixaBay

Why this story matters:

The rather brief romance between Lithuania and the Barclays bank could serve as a case study in economic development and country branding. Like many other conservative governments, Lithuania has been trying to attract prestigious international technology companies to the country to in order to retain its urban and highly educated workers. 

However, the strategy back-fired. Highly-skilled Lithuanian specialists rapidly became disillusioned with the routine tasks they had to perform for Barclays, and as a result the bank needed to increase salaries to retain its workers.

Shortly after, Barclays decided the game was not worth the candle, and moved its IT centers to India, relocating some of its Lithuanian staff there.

It is not unusual that large investors take decisions based on global market logic, and it is also not the first time a valued investor pulls an Irish goodbye. This story of how a prized Western investor is lured to Lithuania before dropping everything and fleeing to greener pastures is a cautionary tale. 

Details from the story:

  • In 2009, the conservative government signed a deal with Barclays. Barclays claimed that they were attracted to Lithuania because of its highly qualified workforce.
  • The bank committed to run a technology center for at least five years. In exchange, the government promised subsidies of an undisclosed amount. Unofficial sources suggest that the total subsidy was 4 million euros over three years. This is comparable to the bank's social security contributions over three months.
  • HCL Technologies, an IT company based in India, will take over 460 staffers. The company already employs 150 workers in Lithuania.
  • Out of its four technology centers, where developers service the bank's operations, only one has been kept -- in India.
  • Dainius Kreivys, who was the minister of economy when Lithuania lured Barclays to set up shop, blames the current government for not being attentive enough to the investor. He claims that lack of government's hand in educating workforce for investors like Barclays is to blame for the withdrawal.
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