Yes Bank, a private sector lender, has recently laid off at least 500 employees as part of a restructuring exercise, according to multiple sources familiar with the situation. The layoffs, which could continue in the coming days, have affected various departments, with the branch banking segment being particularly impacted. Those who have been let go have received a severance package equivalent to three months’ salary.
This decision by the bank is significant as it marks the first instance of a private sector bank conducting layoffs in several years.In contrast, other private sector banks have been actively recruiting staff in recent times.
An individual with knowledge of the matter told ET, “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.”
According to reliable sources, the lender is aiming to reduce expenses by focusing on digital banking and minimizing manual processes. The ongoing restructuring initiative is also expected to contribute to lowering the bank’s operational costs. In the previous financial year, the lender’s operating expenses had increased by nearly 17%.
Between fiscal years 2023 and 2024, the lender’s staff expenses rose by more than 12%. The bank spent Rs 3774 crore on staff expenses at the end of FY24, compared to Rs 3363 crore at the end of FY23. As of FY24, the bank employed approximately 28,000 individuals, having added 484 employees in a single year. Over 23,000 of its employees are classified as junior management.
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Yes Bank has acknowledged its efforts to improve operational efficiency by optimizing its workforce. In an email response, a spokesperson for the bank said, “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.”
The spokesperson further added, “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.”
The private lender had undergone a similar process following the appointment of current managing director Prashant Kumar in 2020, after the bank was rescued from collapse by a Reserve Bank of India-led effort. During that period, many senior staff members departed from the bank.
Yes Bank, with State Bank of India as its largest shareholder, has been facing challenges in improving its operating profits. At the end of FY24, its operating profit increased by 6.4% to Rs 3386 crore, compared to Rs 3183 crore in the previous year.