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Yes Bank Lays Off 500 Staffers In Major Cost-Cutting

By Nithya Bose in Business News, posted June 27, 2024

Private sector lender Yes Bank has started a restructuring, which has resulted in the termination of at least 500 employees.

Sources said this is part of a broader cost-cutting strategy that may see further layoffs shortly.

The layoffs have spanned multiple departments, particularly affecting the branch banking segment.

Those laid off will receive severance packages equivalent to three months' salary.

The restructuring effort is being carried out under the guidance of a multinational consulting firm.

A source said: “Yes Bank has launched an internal restructuring exercise at the advice of a multinational consultant.

“So far, around 500 have been asked to go and we can see more sackings in the coming weeks.

Yes Bank confirmed that the restructuring aims to enhance operational efficiency by optimizing its workforce.

A spokesperson said: “In our endeavour to be an agile, future-ready organisation which is leaner, faster, customer centric, and operationally efficient, we periodically undertake a thorough review of the way we operate and optimise our workforce.

“We are committed to delivering the best of our banking services to our customers and deliver the full potential of the bank to our stakeholders.”

Insiders revealed that the bank is increasingly shifting towards digital banking to reduce manual processes and lower operating expenses.

This ongoing restructuring is expected to help the lender achieve significant cost reductions.

The bank's operating expenses had increased by nearly 17 percent in the previous financial year.

“We are committed to delivering the best of our banking services to our customers and deliver the full potential of the bank to our stakeholders"

Between FY23 and FY24, Yes Bank’s staff expenses rose by over 12 percent, from Rs 3363 crore to Rs 3774 crore.

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By the end of FY24, the bank employed nearly 28,000 people, including 484 new hires over the past year.

A substantial portion of the workforce, over 23,000 employees, is in junior management.

This restructuring mirrors a similar initiative undertaken in 2020 when Prashant Kumar, the current managing director, took over following a Reserve Bank of India-led rescue operation.

That effort saw a significant exodus of senior staff.

This move is notable as Yes Bank is the first private sector bank in years to implement such extensive layoffs, whereas other private sector banks have been on a hiring spree.

Despite these measures, Yes Bank has struggled to enhance its operating profits.

At the end of FY24, the bank's operating profit increased 6.4 percent to Rs 3386 crore, up from Rs 3183 crore the previous year.

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