Axis Bank, India’s third-largest private sector lender, reduced its employee headcount by over 3,100 in FY26, as investments in technology over the years began yielding productivity gains. The bank’s workforce declined from 104,400 at the end of FY25 to 101,300 at the end of FY26, with the reduction taking place gradually over the course of the year.
HDFC Bank, the country’s largest lender, reduced its employee headcount by 3,343 in FY26, with its workforce declining from 214,521 in FY25 to 211,178 in FY26. Meanwhile, RBL Bank reduced its headcount by 949 employees, from 14,265 in FY25 to 13,316 in FY26.
According to Subrat Mohanty, the trend of headcount optimisation at Axis Bank continues as investments made in technology over the years begin to yield productivity benefits. Despite the reduction in headcount, the bank added around 400 branches during FY26, reflecting improved productivity across operations.
“We are gaining productivity across the board — through training and employee enablement, improved branch productivity, and support from technology and digitisation,” he said.
He added that the impact of artificial intelligence (AI) on workforce numbers is yet to fully materialise. “At present, AI is largely improving processing speed, enhancing data usage, and enabling faster end-to-end transaction completion,” Mohanty said.
According to him, the benefits of AI have so far been more visible on the business side, while its impact on headcount is expected to emerge over the next year. “What we are currently seeing is continued investment in technology, along with employee enablement and training, leading to steady productivity gains on a quarter-on-quarter basis,” he added.
The bank did not specify the segments where the reduction in headcount took place. Mohanty indicated that early gains are visible in frontline operations. “As a large distribution organisation with a significant on-ground workforce, improvements in productivity at branches and customer touchpoints are where the initial gains are coming from,” he said.
Technology investments have remained consistent over the past three to four years at 9–10 per cent of the bank’s operating income. “We view technology as a long-term strategic advantage and have continued to invest irrespective of the business cycle,” Mohanty said.
Meanwhile, Sashidhar Jagdishan said the bank’s technology investments have quadrupled to around $1 billion. “The most important strength will be our leadership in the technology space. Over the past few years, we have focused on strengthening the bank’s long-term competitive position anchored heavily in our technology architecture to operate as a technology-first institution,” he said.
“The above leadership position will enable us to harness efficiencies across the organisation and will be a key driver to enhance return on assets over the next one to three years. The guiding principles are return on assets, loan growth and deposit growth, and quality of the balance sheet from a risk standpoint. All of it should culminate in consistent EPS growth,” he said.
According to Kartik Narayan, CEO of Apna Jobs Marketplace, the decline in the bank workforce is mainly due to increased automation rather than purely artificial intelligence (AI).
Although the number of branch-level staff remains largely unchanged, significant reductions are occurring in sales and customer support roles due to digital product adoption, automated calls, and tech-driven processes. It is primarily automation, with AI enhancing efficiency and decision-making capabilities. Entry-level roles can now be handled through automated or AI-assisted systems, reflecting a broader shift across the BFSI sector towards technology-led optimisation, Narayan said.
