Banks across India, Vietnam, and Germany have begun reducing headcount as multi-year investments in AI and digital transformation translate into measurable productivity gains in core banking operations. These workforce cuts sit within a broader industry shift in which banks are prioritising cost efficiency and faster execution. However, the human cost can be significant: layoffs disrupt livelihoods, weaken morale, and strain employer/employee trust, while also carrying reputational risk if stakeholders perceive the transition as prioritising automation over responsible workforce management.
Axis Bank, Sacombank: largescale job cuts in India, Vietnam
In 2025, India’s Axis Bank cut 3,000 jobs as sustained investments in AI began to generate operational efficiencies. For example, 65% of loan sanction letters are now partially generated using AI, while more than 115 million document-related tasks have been processed via AI-led systems.
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This reflects higher operational output per employee, faster turnaround times for routine processes, and growing automation across administrative functions. On the customer side, Axis Bank’s generative AI assistant, ADI, handled more than 10 million chat interactions, indicating rapid adoption of AI-based servicing tools and reduced reliance on branches and human-led customer service for routine queries.
Similarly, at Vietnamese banks, repetitive tasks such as data entry, verification processes, and manual document handling are increasingly being automated. Listed Vietnamese banks cut more than 3,000 jobs in the first quarter of FY 2026, with Sacombank alone accounting for nearly 85% of the decline.
Commerzbank to axe 3,000
Meanwhile, Germany’s Commerzbank plans to cut 3,000 jobs, partly driven by increased investment in AI and broader digital transformation initiatives. The bank forecasts an additional €500m ($581.75m) in value annually from 2030 onward because of such programmes. AI applications are already being deployed across the organisation, with the bank stating that these tools are improving productivity, operational efficiency, and service quality while delivering measurable benefits for both customers and employees. Through this strategy, Commerzbank aims to accelerate profitable growth, improve cost efficiency, and advance technological innovation faster than originally planned.
This reflects a broader restructuring trend across the banking sector. Job cuts help reduce operating costs and allow banks to reallocate capital into higher-growth and technology-focused areas, particularly AI infrastructure and digital capabilities. AI is no longer functioning solely as a back-office upgrade; it is increasingly shaping labour demand across functions once considered relatively resilient, including compliance, operations, customer servicing, and retail banking support.
Long-term labour displacement concerns
While these gains underscore AI’s expanding role in banking, the scale of workforce reductions also raises concerns around long-term labour displacement and organisational restructuring. As AI systems become increasingly capable of handling documentation, administrative workflows, and customer interactions, banks are likely to continue reassessing staffing requirements across a growing number of functions. However, the challenge will be balancing productivity and efficiency gains with the operational, social, and cultural impact of a shrinking workforce. Banks will need to prioritise reskilling and internal redeployment strategies, shifting employees toward areas where human judgment, trust, and interpersonal interaction remain critical, including complex customer support, relationship management, sales, and people-focused functions such as HR.
Bhavya Patel is an Associate Analyst, Banking & Payments, GlobalData
