India’s banking sector is seeing a shift in workforce needs as artificial intelligence and automation allow lenders to expand operations without adding employees at the same pace. Routine operational roles may see slower hiring, while demand is rising for technology, data, AI, cybersecurity and higher-value customer-facing skills.
Axis Bank offers a clear example. They added about 400 branches in FY26, taking its network to 6,275 from 5,879. However, its employee strength fell 3% to 101,337 from 104,453 a year earlier. The figures indicate that branch expansion is becoming less dependent on proportional workforce growth.
Axis Bank expects AI to be embedded across 40% to 50% of operations, call centres and software development over the next 18 months. It also aims to use AI in more than half of customer calls during the current financial year. It has indicated that technology, employee attrition and redeployment can support expansion without a similar increase in headcount.
The wider industry is showing a similar trend. The combined employee strength of HDFC Bank, ICICI, Axis, Kotak Mahindra, IndusInd, Yes, Federal, IDFC First, Bandhan and RBL Bank fell by 10,114 in FY26, after declining by 9,637 in FY25. In FY24, the same group had added 83,645 employees.
HDFC Bank’s workforce fell by 3,343 to 211,178 in FY26. Its non-supervisory workforce dropped by 8,153 to 162,797, while senior, middle and junior management roles together increased by 4,810. It is also focusing more on AI, digital capabilities and employee upskilling.
Kotak Mahindra Bank’s workforce declined by 1,269 to 74,054, but it hired 28,846 people, 42% more than in FY25. Hiring included software engineering, DevOps, cloud infrastructure, AI and data engineering. Its AI-powered career platform also supported about 6,500 internal role movements.
ICICI Bank recorded the largest reduction among major private lenders. Permanent employees fell by 5,148 to 124,029, while total employees, including non-permanent staff, declined by 6,633 to 124,324. It has not linked this reduction to AI or workforce rationalisation.
For banks, AI’s immediate impact is likely to appear in hiring intensity and job design rather than mass layoffs. Repetitive processing, documentation, verification and rule-based tasks face greater automation, while technology, data, risk, sales, advisory and customer-facing skills are gaining importance.
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