ICICI Bank, Axis reduce employee head count

After close to doubling the head count in the past few years, leading private sector lenders, ICICI Bank and Axis Bank, have reduced their head count.

At the end of March, 2015, ICICI Bank, the country’s largest private sector lender, has cut its employee base by 4,369 compared to the last financial year. ICICI Bank’s total work force was 67,857 compared to 72,226 at the end of March 2014. During 2010-2014, the employee base of ICICI Bank more than doubled from 35,256 to 72,226.

During the same period, Axis Bank, the country’s third largest private sector bank’s headcount dropped by 190.  By the end of March 2015, the bank had 42,230 employees compared to 42,420 at the end of March 2014.

Latest figures for HDFC Bank are not available.

A check on operating cost, improving the cost to income ratio and the shift to digital medium by consumers are the main reasons for the change in hiring plans.

“Given the addition of about 14,000 employees in FY2013 & FY2014 and the bank’s focus on productivity and efficiency, the employee base has decreased by about 4,400 during FY2015 to 67,857 employees. This has been achieved primarily by not replacing attrition,” said N S Kannan, Executive Director, ICICI Bank, in an analyst conference call after the fourth quarter earnings.  

ICICI's business per employee has shown an increasing trend since 2009-10 till 2013-14. Data for the last financial year is not available as yet. Though the figure has increased in the post-crisis years, it is still far below the 2008-09 levels. Profit per employee, however, remained stagnant during 2012-13 and 2013-14.

ICICI had indicated that it could rationalise work force as early as September 2014. “We believe given our scale of operations, employee additions through the last two years and our aspirations in terms of growth and productivity, we can do with a lesser number of employees,” Kannan had earlier told analysts in September.

Bankers also agree that with credit offtake remaining tepid, the case for aggressive hiring is weak. In the last financial year, credit growth slipped into single digits and grew by only 9.52% as compared to 13.83% in FY14.

Similarly, Axis Bank increased the headcount from 21,640 at the end of March 2010 to 42,420. But in the last financial year, despite increasing the number of branches from 2,402 to 2,589, the number of employees has come down.

“There is a huge focus on cost-to-income in the bank in general, and particularly in the retail segment. So, we have actually seen the number of employees within the retail bank come down on a YoY basis. We are seeing more and more transactions going through on digital channels and that is also contributing to improve cost-to-income ratios,” said Rajiv Anand, Group Executive- Retail Banking, Axis Bank in an analyst conference call.

Anand also added that with more customers shifting to digital channels, the size of these branches is coming down and therefore the requirement of people within the branches is going down as well.

Axis Bank's business per employee figures rebounded in FY14, after a dip in FY13. Its profit per employee however, has been stable in the last few years.