A first in 9 years: HDFC Bank trims workforce amid tech, AI ramp up

India's largest private sector lender, HDFC Bank, has cut its employee count by 3,343 (or 1.56 per cent) to 211,000 in financial year 2025-26 (FY26), its first staff strength reduction in nine years, as it increasingly embraces the use of technology and participates in the artificial intelligence (AI) evolution.

 

India’s third largest private sector lender, Axis Bank had also reduced its workforce by around 3,100 in FY26 as investments in technology over the years began yielding productivity gains.

 

“As we accelerate the transformation towards becoming a technology-led, customer centric bank, employees need to keep pace. Our focus is on enabling our people to work more productively, and with greater alignment to our customer needs leveraging technology,” said Sashidhar Jagdishan, managing director and chief executive officer (MD & CEO), HDFC Bank in his address to the shareholders in the latest annual report.

 

In the annual report, HDFC Bank highlighted it is redeploying employees from backend functions, where techn- ology-led efficiencies have been achieved, to customer-facing roles. 

 

This comes as the lender transforms into a technology-led, customer-centric bank. 

 

“We are consciously redeploying talent from backend functions, where we are able to bring technology-led efficiencies, to customer-facing roles,” Jagdishan said.

 

HDFC Bank, the second largest employer among commercial banks after India’s largest lender State Bank of India, added employees across senior, middle and junior management in FY26. However, its non-supervisory staff declined by 8,153 to 1,62,797 during the year, taking the staff strength to 211,178, as compared to 214,521 in FY25.

 

The employee count categorised as junior management increased from 34,165 in FY25 to 37,708 in FY26, while middle management’s was up from 9,159 to 10,411 and senior management’s from 247 to 262 during the same period, according to the Annual report. The last time the bank’s staff count declined was in FY17, when it fell by 3,230.

 

The bank said it is building capabilities to participate meaningfully in the AI evolution. In FY26, it adopted a more structured and scalable approach to deploying AI across key customer and operational journeys, including real-time customer engagement, automated card processing and trade operations, intelligent risk monitoring, and automation of routine employee tasks. The progress is driven by Neev, its in-house enterprise AI platform, which provides a unified and secure foundation for model access, governance and workflow integration.

 

According to Jagdishan, the in-house platform provides a unified base for AI deployment across the bank, ensuring consistency, reuse and alignment with enterprise standards. AI-powered solutions are being used to help employees provide faster and more consistent responses to customer queries, while AI applications in retail assets are improving credit decision-making and productivity. In trade operations, AI-assisted classification is enabling quicker and more accurate processing of transactions.

 

HDFC Bank’s attrition rate inched up slightly in FY26 to 23.1 per cent from 22.6 per cent in FY25, but its still much lower than nearly 27 per cent in FY24 and 34.2 per cent in FY23.

 

The bank’s annual report also highlighted that Kaizad Bharucha, deputy MD, received the highest remuneration in FY26, primarily due to a higher performance bonus. Bharucha’s total cash remuneration stood at ₹17.14 crore for FY26, up from ₹11.01 crore a year earlier. Jagdishan received ₹15.13 crore, as compared to ₹12.06 crore in FY25.

 

Former chairman Atanu Chakraborty, who resigned on March 18 this year, received ₹48.25 lakh as remuneration on a proportionate basis for FY26, against an approved annual remuneration of ₹50 lakh. He also received ₹59 lakh as sitting fees for attending board and committee meetings.

 

The bank also mounted a strong defence of its corporate governance standards after the resignation of  Chakraborty triggered questions over the bank’s board processes and oversight.

 

In his message to the shareholders, Keki Mistry, interim part-time chairman of HDFC Bank, said, “...I, together with the Board of the Bank, would like to assure you that the Bank remains strongly rooted in strong corporate governance principles and values”.

 

Jagdishan said, “Your Bank remains committed to the highest standards of corporate governance. We continued to enhance our internal frameworks and refresh key control processes as a part of the organisation’s journey”.

 

To reinforce the bank’s robust governance standards, the Board of Directors took the proactive step of appointing external law firms to conduct a review regarding the statement made by Chakraborty in his resignation letter, Jagdishan said. He added that since the ADRs (American Depository Receipts) of the bank are listed on the NYSE, the Board considered it prudent to engage both, domestic and international law firms for the purpose of this review.

 

Jagdishan said 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.” The exercise involved a review of Board minutes, materials, communications and interviews with all independent directors and several members of senior management, including the MD & CEO and heads of certain control and assurance functions. The review covered the two years preceding Chakraborty’s resignation.

 

“The Bank on June 26, shared the findings of the external law firms which, in essence, was that Mr Chakraborty’s statement in his resignation letter and its implications were not substantiated by the record reviewed and witness interviews,” Jagdishan added.