Private lender Yes Bank has laid off 500 employees as part of an internal restructuring exercise aimed at streamlining operations and reducing costs. The layoffs are expected to be followed by further staff reductions across various departments in the coming weeks.
The workforce reduction affects employees from diverse sectors within the bank, including wholesale banking, retail banking, and branch operations. The branch banking segment seems to be the most impacted by this restructuring effort.
According to The Economic Times, citing unnamed sources, Yes Bank offered a severance package equivalent to three months’ salary to the laid-off employees. This decision comes at a time when most other private lenders in India are expanding their workforce.
Yes Bank undertook this restructuring exercise, advised by a multinational consultant, with the primary goal of improving operational efficiency and reducing overall operating costs. The bank’s operating expenses had grown significantly in the previous year, reaching Rs. 3,774 crores by the end of the 2024 financial year. This represented a 17 per cent increase compared to the prior year.
Yes Bank’s staff strength stood at approximately 28,000 employees at the close of FY24, reflecting a net reduction of 484 employees compared to the previous year. Notably, junior management positions accounted for a significant portion (23,000) of the bank’s workforce.
The rising operating expenses placed pressure on Yes Bank’s profitability. While the bank did experience a profit increase of 6.4 per cent from FY23 to FY24 (Rs. 3,183 crores to Rs. 3,386 crores), according to The Economic Times, these gains were modest compared to the increase in operational costs.
In an effort to cut costs, Yes Bank is aiming to shift its focus towards digital banking solutions and reduce reliance on manual processes.
A Yes Bank spokesperson explained to The Economic Times that the restructuring exercise aligns with the bank’s objective of becoming ‘an agile, future-ready organisation’ that prioritises efficiency, speed, customer focus, and operational effectiveness. They emphasized the bank’s commitment to delivering exceptional service to customers and unlocking its full potential for stakeholders.
This is not the first time Yes Bank has undertaken a workforce reduction strategy. In 2020, following the Reserve Bank of India’s intervention to prevent the bank’s collapse, a similar restructuring exercise resulted in the departure of numerous senior staff members.
