I’ve worked for several companies with dev centers in more out of the way places in Europe: Vilnius, Sofia, and Braga (Portugal). There were a number of obstacles in each.
First, these are just not big cities with a lot of people. They don’t have large labor pools or many companies to choose from like London or Paris or Dublin to start with. It immediately limits the number of locals you can hire without relocation.
Second, many of these locations are not as friendly to immigrants. Either they don’t have existing communities or the visa programs they offer are not friendly to non-EU citizens. It is hard to get Indians to move to Bulgaria when they don’t speak the language, there are few other Indians there, and the govt does not provide visa programs that make it easy. Similarly, even though other EU nationals can work in places like Sofia without a visa, few are interested in this. They either want to go to big markets with all the amenities like Berlin, Paris, Dublin, or they want to stay in their home country. Romanians are not very interested in moving to Lithuania. The best candidates we’d find were Lithuanians who had been working in the US or London who wanted to move back to Lithuania for family reasons but work for a Silicon Valley type company.
This problem was amplified for older workers who had kids or wanted to start a family. They want to know it’s a place they can stay for a while.
Third, often times the govt were just not friendly to tech companies. In Portugal, there were many issues around employees working overtime (at all not just for extra pay), having to give one year notice of layoffs. The business viewed the labor laws as a hassle to do business there. They might put up with it in a market where they can hire a lot, but with the above problems, it made the locations even less attractive.