HDFC Bank Ltd’s workforce has declined. by 3,343 employees in the last fiscal year as India’s largest private bank accelerated efforts to automate operations and redeploy employees to customer-facing roles.
The bank’s total headcount fell to 211,178 as of March 31 from a year earlier, with new hiring down by 3,811, according to its annual report released Saturday.
Of the total, the number of non-supervisory employees — often classified as workers or clerical staff and subordinates — fell by more than 8,000 to 162,797, suggesting that the largest decline may have occurred in operational and back-office roles.
Shares of the Mumbai-based bank fell as much as 1.7% in early trade on Monday, but then pared losses to fall by 0.5%. They have lost about 17% this year against a 3% decline in the Nifty Bank index.
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“Price momentum in HDFC Bank is missing, largely influenced by heavy selling by foreign investors and weakness in the broader market. This is why the stock is highly vulnerable and volatile on any news point,” said Kranthi Pathini, Director, Equity Strategy, WealthMills Securities.
Banks globally, including India, are increasingly using artificial intelligence and automation to streamline routine processes while redirecting employees to higher-value client and consulting functions. Executives from JPMorgan Chase & Co., Citigroup and Standard Chartered have warned that artificial intelligence will eventually reduce the need for some roles while boosting productivity.
“As we accelerate the transformation towards becoming a technology-driven, customer-centric bank, employees need to keep pace,” HDFC Bank CEO Sashidhar Jagdishan said in the annual report.
The number of mid-level and junior-level employees of the bank increased by 1,252 and 3,543, respectively, according to the annual report. 15 additions were made to senior management.
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The bank, which counts foreign institutional investors among its major shareholders, descended into crisis in March after its part-time chairman Atanu Chakraborty suddenly stepped down, citing “certain events and practices” at the bank that were not in line with his “personal values and ethics.” His resignation spooked investors and wiped billions of dollars off HDFC Bank’s market capitalization.
HDFC Bank subsequently appointed local and international law firms to independently review the governance concerns raised after Chakraborty’s resignation, and found no evidence to support his claims.
Jagdishan said Chakraborty’s resignation was a “challenging event” for the bank. “The Board of Directors also constituted a special committee consisting only of independent directors, to provide oversight of the legal review and ensure timely and appropriate flow of information between the bank and law firms in relation thereto,” Jagdishan said.
