Incident 119: Xsolla Employees Fired by CEO Allegedly via Big Data Analytics of Work Activities

Description: Xsolla CEO fired more than a hundred employees from his company in Perm, Russia, based on big data analysis of their remote digitized-work activity, which critics said was violating employee's privacy, outdated, and extremely ineffective.
Alleged: Unknown developed an AI system deployed by Xsolla, which harmed Xsolla employees.

Suggested citation format

Perkins, Kate. (2021-08-03) Incident Number 119. in McGregor, S. (ed.) Artificial Intelligence Incident Database. Responsible AI Collaborative.

Incident Stats

Incident ID
119
Report Count
4
Incident Date
2021-08-03
Editors
Sean McGregor, Khoa Lam

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Incidents Reports

Russian payment services company Xsolla has fired 150 employees at once. What caused controversy wasn’t the staff reduction itself but the CEO’s letter, in which he tried to explain the reason behind this decision.

The email written by Xsolla CEO and founder Aleksandr Agapitov leaked on August 3. At first, some people suspected that it could have been fake, but its authenticity was later confirmed by some local game outlets and the company itself.

150 people were fired from the company’s office in Perm, Russia. Agapitov informed his employees that they were being let go via the letter saying that they have been terminated based on big data analysis of their activity.

Here’s the full translation of the email:

You received this email because my big data team analyzed your activities in Jira, Confluence, Gmail, chats, documents, dashboards and tagged you as unengaged and unproductive employees. In other words, you were not always present at the workplace when you worked remotely.

Many of you might be shocked, but I truly believe that Xsolla is not for you. Nadia and her care team partnered with seven leading HR agencies, as we will help you find a good place, where you will earn more and work even less. Sasha will help you get a recommendation, including the one from myself. And Natalia will read you your rights.

Once again, thank you for your contribution. If you want to stay in contact with me, please write me a long letter about all your observations, injustice, and gratitude.

In the end of the letter, Agapitov also shared a “list of those expelled.”

Agapitov later told App2Top.ru that Xsolla sometimes has to take difficult and unpopular measures to keep growing and evolving. “We want all our employees to think daily about how their actions and decisions affect the company’s fate and success because we have very ambitious goals in the coming years; it is one of Xsolla’s values and it is reflected in everything — from operating standards to compensation system,” he said, adding that all employees will receive compensation packages and help from HR agencies.

As a result, Xsolla faced backlash for what was perceived as secretly spying on its employees. Many people also criticized the letter’s tone.

According to Russian HR expert Alyona Vladimirskaya, using big data and AI in HR shouldn’t violate employees’ rights. “Measuring employees’ performance by their network time and engagement rather than by digitized work results is both outdated and extremely ineffective,” she said, also advising the dismissed employees to sue the company for its actions.

You might also want to check out our summary of Agapitov’ interview regarding the layoffs. And here’s what a laid-off Xsolla employee has to say about the situation.

Updated August 5, 6.58 a.m. PST: Aleksandr Agapitov, CEO and founder of Xsolla, held a press conference and explained that the mass layoffs are due to the fact that the company has stopped showing 40% growth. He also released another controversial statement on Twitter. More on that here.

Xsolla fires 150 employees using big data and AI analysis, CEO’s letter causes controversy

Payment services company Xsolla has reportedly fired 150 of its employees, with workers in the company’s office in Perm, Russia being terminated based on big data analysis of their activity (via Game World Observer).

Making the situation worse, Xsolla CEO and founder Aleksandr Agapitov sent an email to the affected employees explaining the decision, revealing that they had been let go because they had been tagged as “unengaged and unproductive employees.”

A translated version of the email reads as follows:

“You received this email because my big data team analyzed your activities in Jira, Confluence, Gmail, chats, documents, dashboards and tagged you as unengaged and unproductive employees. In other words, you were not always present at the workplace when you worked remotely.

“Many of you might be shocked, but I truly believe that Xsolla is not for you. Nadia and her care team partnered with seven leading HR agencies, as we will help you find a good place, where you will earn more and work even less. Sasha will help you get a recommendation, including the one from myself. And Natalia will read you your rights.

“Once again, thank you for your contribution. If you want to stay in contact with me, please write me a long letter about all your observations, injustice, and gratitude.”

This prompted immediate and predictable backlash: both for the layoffs themselves and for the tone of the email. According to ProPerm.ru, the company is investigating to find the employee who leaked the email.

Following the layoffs, Agapitov held a press conference in which he explained that the mass layoffs were caused by the fact that the company has stopped showing 40% growth. Agapitov provided further details, including that the total number of laid-off employees could total 40% of the company’s headcount across all of its offices.

Following the press conference, Agapitov incited further controversy with a Tweet that roughly translates to “Work your fucking ass off or get your fucking ass out.”

Speaking with Forbes Russia, Agapitov revealed that 60 of the affected employees might stay with the company following discussions with their managers, while those who have been let go will keep their medical insurance and receive medical pay equal to four to six monthly salaries.

Xsolla fires 150 employees based on big data analysis of their activity – “Many of you might be shocked, but I truly believe that Xsolla is not for you.”

150 people have been fired from Xsolla – a game payment company used by Steam, the Epic Games Store and other game developers – via a controversial email from CEO and founder Aleksandr Agapitov.

Agapitov contacted 150 fired employees through email on August 3, stating that “my big data team analyzed your activities” and accused them of being “unengaged and unproductive employees”.

The email starts by saying:

“You received this email because my big data team analyzed your activities in Jira, Confluence, Gmail, chats, documents, dashboards and tagged you as unengaged and unproductive employees. In other words, you were not always present at the workplace when you worked remotely.”

Agapitov also states, “Many of you might be shocked, but I truly believe that Xsolla is not for you” and that employees would receive help through separate HR companies. The email ends by listing the names of everyone who has been fired, and says “If you want to stay in contact with me, please write me a long letter about all your observations, injustice, and gratitude”.

Въебывайте или уебывайте!

— Shurick Agapitov (@agapitovs) August 4, 2021

All of the fired employees were based in Xsolla’s office in Perm, Russia. In a follow-up press conference reported by App2Top, Agapitov claimed that the layoffs were due to the company no longer showing 40 per cent growth.

After the press conference, Agapitov posted a Tweet which Game World Observer reports as translating to “Work your fucking ass off or get your fucking ass out”.

Xsolla has been accused of spying on employees to gather the metrics they were judged on – HR expert Alyona Vladimirskaya has argued that monitoring productivity like this is “extremely ineffective” and encourages fired employees to sue.

Xsolla provides payment services for large companies in the games industry, including Valve, Twitch, Epic Games and Ubisoft.

Game payment company Xsolla fires 150 employees via controversial email

The news raises a number of ethical questions that are especially pertinent in a pandemic-stricken working environment.

Xsolla, the Russia-based games industry payment solution provider, has reportedly laid off upwards of 150 employees following a productivity audit of the company. Originally reported by Game World Observer, the layoffs were a result of an AI-based big data analysis of Xsolla. According to the Observer’s report, the magnitude of the layoffs--which mostly affected employees in company’s Perm offices--was determined after an examination of workers’ productivity across various workspace software, including Gmail, Jira, and Confluence, in addition to others. 

Although unfortunate--especially considering the ongoing COVID-19 pandemic--the layoffs themselves aren’t the ultimate controversy here. Rather, it’s the way Xsolla CEO Aleksandr Agapitov handled the situation. In a company email, which has been translated from Russian, Agapitov used language that could be flippant and insulting. In particular, he specifically labeled fired employees as “unengaged and unproductive,” stating that “I truly believe Xsolla isn not for you.”

Following the email last week, Agapitov took to Twitter and posted a statement that roughly equates to “get the fuck in, or get the fuck out,” according to various translations.

Further complicating the situation is the fact that many of the employees appear to have been unaware that their activities were being tracked by Xsolla’s data collection AI. It’s a personal breach that Renee Gittins, executive director of the International Game Developers Association (IGDA), calls frightening and unethical.

“Layoffs are not uncommon, particularly in a turbulent industry like games,” Gittins told GameDaily. “Choosing who to let go of and how to communicate downsizing can be a difficult task. Unfortunately, Agapitov's termination emails and surrounding commentary lacked empathy and respect for those whose lives have been affected. Terminating such a large amount of people based on activity in software that they were not aware was being tracked is not only concerning from a business perspective but also a cultural and ethical one.”

Gittins said that evaluating a worker’s productivity based on software interaction and without their knowledge is deeply inappropriate and morally wrong. The nature of creative work, she explained, is impossible for AI software to track, and professionals in such a field will often approach their jobs in unique and unconventional ways.

“Such an evaluation could harm those with nonstandard approaches and with different neurodiversities, even if their overall output matches their peers. Tracking such values and then terminating people based on them is sure to create distrust and anxiety within the culture of Xsolla's workforce.”

In this way, Gittins expects Agapitov and Xsolla’s actions to perpetuate distrust, resulting in even more of the undesired behavior that the company cited in the first place, a cycle that is likely to sow low morality among the workforce. Further, the fact that AI software was used to make such rash decisions could speak to a greater problem of disorganization and inefficiency within Xsolla as a whole.

“It is common business sense to only measure and promote KPIs that are of direct benefit to the business behaviors you desire,” Gittins said. “People are very likely to behave in a way to maximize those values even if those values do not result in business returns and profits. It would not surprise me if Xsolla sees tickets for tasks too small to warrant them, drafts in Google Documents that would be more efficiently created on paper or whiteboards, and other behaviors to keep up these tracked metrics that may overall hurt productivity.”

In the fallout of the layoffs, some are sure to question what legal recourse, if any, former Xsolla employees might have. The answer is largely dependent on a number of variables, including evidence gathered by those affected, Russian employment law, and other stipulations. These are all outside the purview of attorney Richard Hoeg, who practices in Michigan, USA, but there is some conjecture that can still be made in this situation.

“The biggest issue I can see here from afar could possibly be data collection and privacy,” Hoeg told GameDaily. “In general, employers have the right to ensure productivity (certainly on their own equipment), but it's possible that trying to maintain that control on private computers (with whatever scans/analysis is necessary) could trip some data rules. They also would likely have had to make sure the employees/contractors knew that’s what they were doing.”

Hoeg’s speculation is predicated on the fact that much of the games industry shifted to remote work at the onset of the pandemic. As such, many workers are utilizing their own computers and hardware to perform work duties, raising even more ethical questions regarding Xsolla’s use of data collection software.

It’s unquestionably a gray area, and Agapitov himself noted that much of the layoffs affected employees working remotely:

“In other words, you were not always present at the workplace when you worked remotely,” he wrote in the email. 

In all, the layoffs paint a grim picture of how Agapitov values his employees. The pandemic has not been easy for anybody, but it appears that Xsolla expected work to continue as normal. Using AI-based tracking software raises a host of ethical concerns, and perhaps Agapitov needs to address such questions publicly.

Xsolla fires 150 employees following AI-based productivity audit