| Axis Bank added about 400 branches in FY26 even as its employee strength fell 3%, signalling slower headcount growth as technology and AI improve productivity.
The 10 largest private banks cut combined employee strength by 10,114 in FY26 after a 9,637 decline in FY25, reversing the 83,645 addition recorded in FY24. HDFC Bank reduced non-supervisory staff while expanding management roles, while Kotak Mahindra Bank cut net headcount but increased hiring in AI, data engineering, software, cloud and DevOps. AI is expected to reshape bank hiring by reducing demand for some routine roles and increasing demand for digital, analytical and specialised skills, making reskilling increasingly important. |
Artificial intelligence and automation are beginning to change the hiring equation at Indian banks, with lenders finding that technology can support business and branch expansion without a proportional increase in employee numbers. The shift could reduce the need for incremental hiring in some routine operational roles while increasing demand for technology, data, AI, cybersecurity and higher-value customer-facing skills.
The clearest indication has come from Axis Bank, which added about 400 branches in FY26 even as its employee strength fell 3% to 101,337 from 104,453 a year earlier. Its branch network increased to 6,275 from 5,879. The numbers suggest that the bank’s expansion is becoming less dependent on a proportional increase in employee numbers.
Axis Bank has said AI is expected to be embedded across 40% to 50% of operations, call centres and software development over the next 18 months. It is also targeting the use of AI in more than half of customer calls during the current financial year. The bank has indicated that technology, attrition and redeployment can allow it to expand without increasing headcount at the earlier pace.
Broader shift
The broader workforce numbers show that the shift is not confined to Axis Bank. The combined employee strength of HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank, Yes Bank, Federal Bank, IDFC First Bank, Bandhan Bank and RBL Bank fell by 10,114 in FY26, following a decline of 9,637 in FY25. In contrast, the same group added 83,645 employees in FY24.
HDFC Bank illustrates how technology and changing business requirements can alter the composition of a bank’s workforce. Its total employee strength declined by 3,343 to 211,178 in FY26, but non-supervisory employees fell by 8,153 to 162,797. At the same time, its senior, middle and junior management workforce increased by a combined 4,810. The bank has also been increasing its focus on AI, digital capabilities and employee upskilling.
Kotak Mahindra Bank offers another indication of where hiring could move. Its overall workforce declined by 1,269 to 74,054 in FY26, but it hired 28,846 employees during the year, 42% more than in FY25. Its recruitment included software engineering, DevOps and cloud infrastructure, and AI and data engineering. The bank also facilitated about 6,500 internal role movements through its AI-powered career platform.
The Kotak numbers highlight the distinction between lower net headcount and lower hiring. A bank can reduce its overall workforce while continuing to recruit heavily for specialised roles as the skills required to operate the business change.
ICICI Bank recorded the largest reduction among the major private lenders, with its permanent employee strength falling by 5,148 to 124,029 in FY26. Its total employee count, including non-permanent employees, fell by 6,633 to 124,324. The bank, however, has not attributed the reduction to AI or disclosed that it was driven by workforce rationalisation, making it inappropriate to treat the decline as an AI-related job cut.
For banks, therefore, the immediate impact of AI is likely to be felt first in hiring intensity and job design rather than through mass layoffs. Functions involving repetitive processing, documentation, verification, servicing and other rule-based tasks are among those most exposed to automation, while banks are increasing their requirements for technology, data, risk, sales, advisory and customer-facing capabilities.
The shift could make some traditional entry-level banking roles less important as a source of incremental hiring, while increasing demand for candidates who combine banking knowledge with digital skills. Employees already within banks could also face greater pressure to reskill as automated workflows change the nature of existing jobs.
The emerging pattern points to a change in the composition and pace of bank hiring rather than a simple substitution of humans by machines. Banks are becoming more selective about adding employees while increasing their emphasis on technology, data and specialised skills, potentially creating a banking workforce that grows more slowly but requires a broader and more technical skill set.
