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Tech Hiring Surges in Smaller Cities as Metros Cool
Companies in India are opening many more technology jobs in smaller cities.
These cities had 41,000 active tech openings in September 2026, compared with 21,000 a year earlier.
The large percentage increase partly happened because last year’s number was small.
Still, the number of jobs has generally risen since May 2025.
Bigger cities still have many specialized jobs, such as product engineering and leadership roles.
Smaller cities are attracting work such as shared services and transaction processing.
Companies may save on offices and keep workers longer in these locations.
However, Xpheno says this shift may be temporary and hiring could move back to megacities soon.
Active tech job openings in India’s Tier 2 and Tier 3 cities rose from 21,000 in September 2025 to 41,000 in September 2026.
The 95% year-on-year increase was amplified by the low hiring base last year, but Xpheno said the broader upward trend is consistent.
Hiring growth is led by IT Services and BPM, with Ahmedabad, Coimbatore, Kochi, Indore, Nagpur, Guwahati, Jaipur, Lucknow, Trivandrum and Chandigarh among the leading cities.
Companies are increasingly considering smaller cities because of lower operating costs, better retention and state incentives, rather than salary differences alone.
India’s total active tech openings reached 117,000 in September 2026, while Xpheno expects hiring patterns could shift back toward megacities within one or two quarters.
- Who
- Indian technology companies, particularly IT Services, BPM, software product and e-commerce firms, are hiring in smaller cities; Xpheno provided the analysis.
- What
- Active technology hiring in Tier 2 and Tier 3 cities increased 95% year on year, while overall Indian tech hiring also recovered.
- Where
- Across India, especially in cities including Ahmedabad, Coimbatore, Kochi, Indore, Jaipur, Lucknow and Chandigarh.
- When
- The figures cover September 2026, with comparisons to September 2025 and earlier monthly data.
- Why
- Companies are seeking lower operating and real-estate costs, improved talent retention, access to incentives and more efficient operations.
Evidence of a lasting shift
A potentially temporary cycle
Meaning of the smaller-city growth
Evidence of a lasting shift
The rise from 21,000 to 41,000 openings, along with near-monthly growth since May 2025, indicates that smaller cities are becoming established technology hiring hubs.
A potentially temporary cycle
Xpheno co-founder Kamal Karanth said the 95% increase is partly a statistical effect caused by the low base last year.
Why companies are relocating work
Evidence of a lasting shift
Lower operating costs, better retention, lower real-estate expenses and government incentives could continue to make smaller cities attractive.
A potentially temporary cycle
The salary advantage between megacities and smaller cities has narrowed, and technology talent demand can change quickly with business conditions and revenue pressures.
Future hiring geography
Evidence of a lasting shift
Cities such as Coimbatore, Chandigarh and Jaipur are developing recognizable talent specializations, suggesting a deeper regional ecosystem.
A potentially temporary cycle
Karanth expects the current surge to be cyclical and believes hiring could swing back toward metros and megacities within one or two quarters.
Key facts
- Tier 2 and Tier 3 openings
- 41,000 active tech openings in September 2026, up from 21,000 in September 2025.
- Megacity openings
- 76,000 active openings in September 2026, after reaching 99,000 in July 2025 and falling to 58,000 in June 2026.
- Overall tech openings
- 117,000 active openings in September 2026, up 7% month on month and 15% year on year.
- IT Services openings
- 57,000 active openings in September 2026, an 18-month high and up 30% month on month.
- Full-time roles
- 90,000 of the 117,000 total active tech openings were full-time positions.
- Mid-senior roles
- Mid-senior positions accounted for 64,000 active jobs.
- Cost differences
- Some smaller cities offer rental and operating costs around 30-40% lower, while commercial rents in Bengaluru and other megacities have risen 15-20%.
Quotes
Kamal Karanth
Co-founder of staffing firm Xpheno
“We do believe the current surge is one such cyclical movement, and under current conditions, we expect the pattern to swing back towards the metros and megacities in a quarter or two”
financialexpress.com
“Coimbatore for engineering skills, Chandigarh for R&D & IT, Jaipur for BPM and process back-offices are almost becoming brands in the talent market”
financialexpress.com
Sources
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