Context:
India’s top private banks, HDFC Bank and ICICI Bank, significantly slowed down hiring in FY25, even as they expanded branch networks, reflecting a shift toward productivity enhancement and tech-driven efficiency.
Key Reasons for Hiring Slowdown
According to Suresh Ganapathy, Head of Financial Services Research, Macquarie Capital:
- Productivity and efficiency improvements have reduced manpower requirements.
- Non-replacement of resigning employees as a cost-saving measure.
- Increased use of AI and technology to drive growth:
- ICICI Bank has doubled tech expenses as a share of operational spend (from 5% to 10.5%) over 5 years.
- Absolute tech spending has risen 4x in the same period.
State-Owned Banks: Similar or Different?
- SBI’s workforce has been shrinking steadily:
- FY20: 249,448 employees
- FY24: 232,296 employees
- Net loss: 17,152 employees over 5 years
- RBI data suggests that while private banks’ workforce has grown 2.78x over a decade, overall hiring has now plateaued.
Outlook
- The slowdown in hiring at HDFC Bank and ICICI Bank may indicate a larger structural shift in India’s banking sector.
- As automation, AI, and digital banking scale, the need for large frontline teams may be diminishing.
- Analysts are closely watching Axis Bank, SBI, and other major lenders’ Q4FY25 results to assess whether this trend will extend sector-wide.
