Shares of Yes Bank were trading slightly in a tight range after the lender reportedly let go of hundreds of employees as it looks to cut costs.
What Happened: Yes Bank has laid off at least 500 employees as part of a restructuring exercise, with more layoffs expected in the coming days, Economic Times reported.
The layoffs span several verticals, including wholesale, retail and especially branch banking, which saw a significant impact, sources told the business daily. The affected employees will receive severance pay of three months’ salary.
The restructuring reportedly follows advice from a multinational consultant, aiming to make Yes Bank operationally efficient by optimising its workforce.
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Yes Bank aims to reduce costs by shifting towards digital banking and minimising manual processes, sources told the publication. The ongoing restructuring is expected to help cut operating expenses, which grew nearly 17% in the last financial year.
The company also said it plans to raise funds through debt securities, pending approval by shareholders, though it did not put a number on the amount it will look to borrow.
Yes Bank’s staff expenses rose over 12% between fiscal years 2023 and 2024, with the bank spending ₹3,774 crore on staff expenses in FY24, up from ₹3,363 crore in FY23. Yes Bank had around 28,000 employees at the end of FY24, having added 484 employees that year. Over 23,000 of the workforce belong to the junior management category.
This restructuring mirrors a similar exercise conducted after Prashant Kumar became CEO in 2020 following a Reserve Bank of India-led rescue effort. At that time, many senior staff exited the bank.
Yes Bank’s move is significant as it is the first private sector bank in years to undertake layoffs, while other private sector banks have been hiring. The bank, which counts State Bank of India as its largest shareholder, has been trying to improve its operating profit.
Price Action: Yes Bank’s share price was up 0.25% at ₹24.08, recovering from a dip of 0.2% at open on Wednesday. The stock has gained 6.31% so far this year.
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