Yes Bank Cuts Jobs Drastically in New Cost-Cutting Initiative

According to multiple media outlets, Yes Bank has started a cost-cutting exercise by terminating 500 staff. Additional layoffs are anticipated in the upcoming weeks. This action is a component of an internal restructuring plan meant to boost productivity and lower operating expenses. Employees in a number of verticals, including branch banking, retail, and wholesale, have been touched by the layoffs. Three months’ worth of severance pay had been given to the affected employees.

The reorganization is a component of Yes Bank’s larger initiative to reduce manual procedures and concentrate on digital banking. The bank wants to reduce costs and streamline processes by embracing digital transformation. According to a Yes Bank representative, the bank regularly evaluates and optimizes its personnel in order to stay a flexible, customer-focused, and future-ready business.

The most recent round of layoffs reminds us of a similar restructuring process that happened in 2020 when Prashant Kumar, the current managing director, was appointed. A number of senior employees left the bank during that time as the Reserve Bank of India spearheaded a rescue operation to keep it from collapsing. The majority shareholder of Yes Bank is still State Bank of India, notwithstanding the bank’s ongoing struggles to increase operating earnings.

In spite of the layoffs, Yes Bank announced that its operational profit at the end of FY24 increased by 6.4% to Rs 3,386 crore from Rs 3,183 crore the year before. This improvement reflects efforts made by the bank’s current management to stabilize and strengthen the bank’s financial condition.

In addition, Rana Kapoor, the founder of Yes Bank, was released on bail in April 2024 following his arrest in March 2020 on allegations of money laundering and lending fraud. Regarding the scams at Yes Bank, the Enforcement Directorate and the Central Bureau of Investigation have filed numerous complaints against him.

Yes Bank’s operating expenses rose by 17% to Rs 3,774 crore in the most recent fiscal year, mostly as a result of labor costs. At the end of the fiscal year, the bank had 28,000 employees, of whom 23,000 were classified as junior managers. It is anticipated that this reorganization will lower these costs and increase the bank’s operating effectiveness.

Positive trends are seen in Yes Bank’s most recent financial reports, which show a 123% year-over-year growth in net profit for Q4FY24, reaching Rs 452 crore. In FY24, the bank’s non-interest revenue increased significantly as well, accounting for 38.8% of the total yearly rise. The bank’s continuous efforts to improve its operational stability and financial performance are reflected in these results.

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