HDFC Bank loses 4,500 employees in Q3

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As the banking industry increasingly looks towards bringing in automation to boost productivity, hiring could slow down further.

 

With its earnings growth slipping down to an 18-year low and costs becoming a huge concern, HDFC Bank had to let go of nearly 4,500 employees in the October–December quarter. As the banking industry increasingly looks towards bringing in automation to boost productivity, hiring could slow down further.

For now, analysts believe this employee reduction is probably the largest by the bank in a single quarter and is likely to continue if the economic recovery does not quicken. The bank believes that the current drop in headcount is primarily due to a combination of natural attrition and hiring at a clip lower than normal.

As per the bank’s data, total employees of the bank fell to 90,421 in December 2016, down five per cent from 95,002 in September 2016. Some of the drop could also be attributed to natural attrition.

HDFC Bank revealed this week that its net profit grew 15 per cent to Rs 3,865 crore from Rs 3,357 crore a year earlier— the slowest profit growth since June, 1998. Pre-tax profit in trading of bonds and currencies fell to Rs 253 crore, from Rs 513 crore a year earlier, while fee income grew just 9.4 per cent year-on-year as some streams of the bank’s fee line were hit due to demonetisation.

Later, post the results, deputy managing director, Paresh Sukthankar said the staff cuts were part of a regular bank exercise to improve efficiency and productivity of employees.

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