India’s three major private-sector lenders including HDFC Bank, Axis Bank and Kotak Mahindra Bank, ended FY26 with at least 7,712 fewer employees between them, as technology investments, process simplification and productivity programmes began reshaping their workforce structures.
The numbers, however, should not automatically be read as 7,712 layoffs. The disclosures reflect a net decline in year-end employee strength, which can include attrition, lower replacement hiring, internal redeployment and deliberate role rationalisation. The banks have continued to recruit while becoming more selective about where people are added.
HDFC Bank’s reduction concentrated in non-supervisory roles
HDFC Bank’s employee strength declined by 3,343, from 214,521 at the end of FY25 to 211,178 as of March 31, 2026. The decline was concentrated in its non-supervisory workforce, which fell by 8,153 to 162,797. At the same time, the bank added employees across senior, middle and junior management levels, indicating a shift in workforce composition rather than a uniform reduction across the organisation.
The lender continued to hire at scale during the year. It onboarded 45,902 employees, while 49,214 employees exited, resulting in the lower year-end headcount. Its employee turnover rate rose marginally to 23.1% from 22.6% in FY25.
Managing Director and CEO Sashidhar Jagdishan said the bank is consciously moving talent from backend functions, where technology is generating efficiencies, into customer-facing roles. HDFC Bank also recorded more than 1.36 crore learning hours during FY26 as it sought to prepare employees for AI-enabled processes and changing business requirements.
The bank added 234 branches during the year, taking its total network of branches and digital banking units to 9,689. This suggests that the operating model is becoming leaner even as the physical distribution network continues to expand.
Axis cuts headcount while adding 400 branches
Axis Bank’s employee count fell by approximately 3,100, from more than 104,400 at the end of FY25 to over 101,300 in FY26. The reduction took place even as the bank opened about 400 branches during the year.
Executive Director Subrat Mohanty attributed the decline to productivity gains created by sustained technology investment, digitisation, employee enablement and improved branch productivity. He also clarified that the reduction was broad-based rather than directed at one particular business or function.
Axis Bank said AI’s direct impact on workforce numbers had not yet fully emerged. Its current use cases are primarily improving processing speed, data utilisation and transaction completion, although management expects the potential headcount impact to become clearer as these capabilities mature.
The bank has maintained technology expenditure at around 9% to 10% of operating expenses over recent years, positioning digital investment as a long-term productivity lever rather than a short-term cost programme.
Kotak trims workforce but steps up specialised tech hiring
Kotak Mahindra Bank’s standalone workforce declined by 1,269 employees, from 75,323 in FY25 to 74,054 in FY26. Permanent employees fell from 61,170 to 60,357, while the number of other-than-permanent employees decreased from 14,153 to 13,697.
Yet the bank continued to expand its in-house technology capabilities, recruiting specifically across software engineering, DevOps and cloud, and AI and data engineering. This targeted hiring illustrates how overall headcount can decline while demand grows for specialised digital skills.
Kotak also facilitated around 6,500 internal movements through its AI-enabled talent marketplace, My Kareer, helping employees explore roles and build new capabilities within the group.
The bank linked its headcount optimisation to process simplification and technology adoption. More than 200 branch processes were centralised into operations hubs during FY26, freeing frontline capacity for customer engagement and contributing to higher productivity.
A change in workforce mix, not simply fewer people
Together, the disclosures reveal a broader shift in banking employment. Routine processing and high-volume support roles are coming under pressure as workflows become digital and increasingly automated. At the same time, demand is moving towards technology specialists, data professionals, relationship managers, control functions and employees capable of working across human and AI-enabled systems.
For HR leaders, the challenge is therefore larger than managing headcount. Banks will need to identify which roles are declining, build credible internal-mobility pathways and reskill employees before technology makes their existing work redundant. The emerging model is not necessarily a people-light bank, but one in which fewer employees perform repetitive work and more talent is deployed where judgement, customer trust and specialised expertise remain essential.