HDFC Bank's automation & AI push cuts over 3,300 job in FY26

In the fiscal year that ended in March, HDFC Bank Ltd.'s workforce declined by 3,343 employees as the lender upgraded its automation and moved people to customer-facing positions. The bank's overall workforce decreased to 211,178 as of March 31 from a year earlier, while new hiring decreased by 3,811, according to its annual report, which was made public on July 11.

Along with addressing governance issues that emerged following the resignation of its part-time chairman earlier this year, the annual report also showed changes across staff categories. The bank hired more middle- and junior-level employees during the year, but it cut its overall headcount.

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Non-supervisory employees fell by more than 8,000 to 162,797, indicating that a significant part of the reduction may have been in operational and back-office roles. At the same time, HDFC Bank's middle- and junior-level headcounts increased by 1,252 and 3,543, respectively. There were also 15 additions to the senior management.

Automation and artificial intelligence have been implemented by banks all around the world, particularly in India, to automate repetitive tasks and transfer staff to higher-value customer and advising roles. AI will eventually eliminate certain jobs while increasing productivity, according to executives from JPMorgan Chase & Co., Citigroup Inc., and Standard Chartered Plc.

"As we accelerate the transformation toward becoming a technology-led, customer-centric bank, employees need to keep pace," Chief Executive Officer Sashidhar Jagdishan said in the annual report.

The Mumbai-based bank, which counts foreign institutional investors among its major shareholders, came under pressure in March after its part-time chairman, Atanu Chakraborty, stepped down abruptly. He cited "certain happenings and practices" at the lender that were not in line with his "personal values and ethics". His resignation triggered investor worries and wiped out billions of dollars from HDFC Bank's market value.

HDFC Bank later appointed domestic and international law firms to independently review the governance concerns raised after Chakraborty's resignation. The review found no evidence to substantiate his allegations.

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Jagdishan described Chakraborty's resignation as a "challenging event" for the bank. "The board also constituted a special committee comprising solely of independent directors, to provide oversight on the legal review and ensure appropriate and timely flow of information between the bank and the law firms, in relation thereto," he said.

The annual report said the bank reduced its overall workforce and hiring during the year even as it increased staff at the middle and junior levels, amid a wider push towards automation and customer-facing roles. It also addressed the governance issues raised after Chakraborty's resignation and said the independent review found no evidence to support the allegations.