By Sam Boughedda
Investing.com -- Upwork Inc. (NASDAQ:UPWK) shares dropped more than 6% at the start of Monday's session after the company suspended all of its business operations in Russia and Belarus and withdrew its previously issued first-quarter and full-year 2022 guidance.
Upwork said the suspension will take full effect by May 1, 2022, and start with shutting down support for new business generation in Russia and Belarus.
"Over the coming days, customers in Russia and Belarus will no longer be able to sign up for new accounts, initiate new contracts, or be visible in search. Existing contracts with talent and clients in the region will remain open, with final billing due by May 1, 2022," the freelancing platform stated.
The withdrawal of guidance was put down to "rapidly evolving, increased risks and uncertainties," and an "untenable operational position and dire geopolitical situation associated with the ongoing Russian war against Ukraine."
Around 10% of Upwork's total revenue in 2021 was derived from work where the talent or the client was located in the region. Ukraine represented approximately 6%, and Russia and Belarus represented about 4% combined. Nearly all such revenue emanated from work performed by talent inside the region for clients in other parts of the world.
Upwork said it has seen a "meaningful decrease" in activity from talent in the region, most notably in Ukraine, since the start of the invasion in late February.
The company said it has provided financial and other support, including paying certain expenses for team members aiming to relocate from the affected region. In addition, Upwork added that it has already incurred or committed several million dollars of other unplanned expenses, including a donation of $1 million to Direct Relief International, and expects to incur further costs as events unfold.
As a result, Upwork explained that the unforeseen expenses and decreased activity from talent in the region will impact its first-quarter and full-year 2022 financial results, including revenue and adjusted EBITDA.