Bengaluru’s IT Slowdown: Impact on Telugu Tech Families and Housing Market

Bengaluru has long been synonymous with India’s IT industry, drawing thousands of professionals from across the country. Over the years, the city’s startup ecosystem has thrived, leading to an influx of migrants and increasing urban congestion. However, with rising competition from cities like Hyderabad and Chennai, many IT companies and Global Capability Centers (GCCs) are shifting operations away from Bengaluru. Additionally, issues such as high living costs, soaring rents, and water shortages are making life challenging for residents.

A significant portion of Bengaluru’s IT workforce hails from the two Telugu-speaking states—Andhra Pradesh and Telangana. However, the recent slowdown in the IT sector, coupled with global economic challenges and an emphasis on local hiring in the US, has resulted in job losses. Many companies are also integrating AI-driven technologies, leading to a reduction in workforce requirements. Experts suggest that automation is particularly affecting jobs in coding and other IT-related roles.

The widespread adoption of AI has already disrupted the job market in countries like the US, and India, heavily reliant on its IT services sector, is now feeling the impact. Cost-cutting measures by tech firms have led to significant layoffs, raising concerns among Telugu entrepreneurs and professionals in Bengaluru.

Housing and rental markets in key IT corridors are also experiencing a downturn. Landlords, unwilling to lower rental prices, are leaving properties vacant, prompting many professionals to return to their hometowns. Paying Guest (PG) accommodations, once thriving with IT employees, are witnessing rising vacancies, particularly in areas along the Outer Ring Road—home to several IT firms.

PG owners claim that declining demand has made it difficult to sustain operations, while homeowners in IT hubs struggle with unoccupied rental properties. Just a year ago, three-bedroom apartments in prime IT locations were rented for around ₹25,000 per month, but now many remain vacant. Following the post-COVID return-to-office mandates, these accommodations were fully occupied; however, with mass layoffs and declining IT job opportunities, the rental market is facing a significant slump.

According to data from last year, 87 companies in Bengaluru laid off approximately 23,504 employees, reflecting the broader challenges faced by the city’s IT sector. As businesses and professionals navigate these uncertain times, Bengaluru’s once-thriving tech industry is undergoing a transformation, with lasting economic and social implications.