Private sector lender Yes Bank has given marching orders to at least 500 employees in a restructuring exercise that could see more such layoffs in the coming days, multiple people aware of the development said.
While the layoffs have happened across several verticals ranging from wholesale to retail, the branch banking segment saw a large impact, one person cited above said. The people sacked have been given severance pay amounting to three months’ salary.
“Yes Bank has launched an internal restructuring exercise at the advice of a multinational consultant. So far, around 500 have been asked to go and we can see more sackings in the coming weeks,” a person aware of the development said.
Yes Bank confirmed that it’s looking to become operationally efficient by optimising its workforce.
“In our endeavour to be an agile, future-ready organisation which is leaner, faster, customer centric, and operationally efficient, we periodically undertake a thorough review of the way we operate and optimise our workforce,” a spokesperson said in an email response.
“We are committed to delivering the best of our banking services to our customers and deliver the full potential of the bank to our stakeholders.”
Sources in the know said the lender is looking to cut costs by leaning towards digital banking and cutting down manual intervention. An ongoing restructuring exercise is also going to help the lender cut its operating expenses, a source said. Its operating expenses had grown nearly 17% in the financial year gone by,
Staff expenses for the lender grew over 12% between fiscal year 2024 and 2023. While the lender spent Rs 3774 crore on staff expenses at the end of FY24 this figure was at Rs 3363 crore at the end of FY23. The bank had around 28,000 employees at the end of FY24 and it had added 484 people in one year.Over 23,000 of its workforce belong to the junior management category.
The private lender had undergone a similar exercise after current managing director Prashant Kumar took over the corner office in 2020 after a Reserve Bank of India-led rescue effort saved the bank from going under. At that time, a lot of senior staff had exited the bank.
This move by the bank gains importance as this is the first private sector bank in several years to undertake layoffs. All other private sector banks have been hiring staff in recent times.
The bank, whose largest shareholder is State Bank of India, has been struggling to improve its operating profits. At the end of FY24, its operating profit grew 6.4% to Rs 3386 crore versus Rs 3183 crore a year ago.
