The bank's staff strength has fallen by 6,096 or 7 percent to 84,325 in the quarter ended March 2017 from 90,421 in December 2016.
This reduction is the highest in a quarter and at least one-third more than 4,581 people the bank lost in the previous quarter ending December 2016.
“We have not replaced the staff which has moved out due to attrition and have rebalanced our capabilities due to the increase in digital transactions," said Paresh Sukthankar, Deputy Managing Director at HDFC Bank.
We have seen an increase in digital transactions which has given us certain efficiencies linked to the digital channel, he said.
The total employee strength now stands at 84,325 as on March end, down from 87,555 a year ago.
Even though bank branches have increased, expansion has slowed from an average of 400 to bout 200 branch additions per year currently.
HDFC bank's branch network has increased to 4,715 branches and 12,260 ATMs till March 2017, up from 4,520 branches and 12,000 ATMs in March 2016.
This also helped the bank cut its employee costs by 4 percent to Rs 1,553 crore in March 2017 from Rs 1,498 crore in March 2016.
Sukthankar said, "It is fair to say that we will open new branches at a slower pace and it will be at an annual rate of 200 or lower rather than the average we saw earlier. Our people needs will also be lower due to the transaction efficiencies, so it's also fair to say that our employee count will be around current levels or lower and not grow at the pace it was growing earlier."
Clearly, given the surge in bad loans that are troubling the banking sector, coupled with reducing costs and increasing efficiencies with the rise of digital technology, the most employable industry is also hurting the job market.