A bank employee counts money for a customer at a private branch in HCM City. Many Vietnamese banks are laying off thousands of employees to cut costs and enhance efficiency with technology. — VNS Photo Bồ Xuân Hiệp

HCM CITY — After 15 years in the banking sector in HCM City, 40-year-old Lưu Thị Giang from the Central Highlands province of Đắk Nông received the news that she was being laid off.

The sudden change has left her feeling overwhelmed and uncertain about how she will support herself during this difficult time.

Phạm Danh Tiếng, 42, from Gò Vấp District and employed by a local private lender, is increasingly anxious about potential job loss as banks nationwide reduce their staff.

“It’s been incredibly stressful,” he said. “Layoff stories are everywhere, and even middle management isn’t safe.”

Job security is declining for many, including those without formal finance qualifications, he said. “For those still employed, the situation is tough, with increased responsibilities, longer hours, and weekend sacrifices to meet rising demands.”

The banking sector is undergoing significant changes, as institutions strive to streamline operations. leading to thousands of layoffs.

Many banks are making drastic cuts, letting thousands of employees go as part of a strategy to reduce costs and boost efficiency through technology.

In the past five years, Sacombank has reduced its workforce, going from over 17,400 employees at the start of 2024 to about 17,058 by the end of the year.

Similarly, BIDV, one of the country’s major State-owned banks, recently laid off 1,000 employees, marking its first workforce reduction in five years.

Other banks, including VIB, MSB, and ACB, have also cut their staffs by several hundred this year.

At State-owned VietinBank, while the headcount remained stable last year, the focus has shifted towards maintaining current levels rather than expanding.

Digital transformation

In recent years, many banks have embraced digital transformation as a critical strategy for cost-cutting and efficiency.

The concept of “cashier-less banks” is becoming a reality, with foreign banks leading the charge and Việt Nam following suit.

A senior executive at a state-owned bank noted the shift from merely increasing staff to enhancing digital skills and productivity.

Rather than a blanket approach to compensation, banks are now tailoring rewards to recognise high performers.

Nguyễn Đức Thạch Diễm, general director of Sacombank, explained that automating repetitive tasks allows for a leaner workforce while providing 24/7 services.

The bank is restructuring roles to align with new technology standards, prioritising hires with skills in areas like artificial intelligence to better serve customers.

Đinh Đức Quang, director of the Currency Business Division of UOB Bank Vietnam, highlighted that digital solutions have reduced the need for staff in certain tasks.

He emphasised the importance of personal interactions with customers. Roles that require strong communication and relationship-building skills remain vital, he noted.

Despite the challenges posed by digital transformation, some banks are still expanding.

MBBank added 1,674 employees last year, while VPBank increased its workforce by 1,404.

Other banks such as HDBank, Vietcombank, and LPBank also grew their teams, showing that opportunities for growth persist even in a changing landscape.

Challenging outlook

Experts have warned the global banking sector, too, is on the brink of significant change as artificial intelligence (AI) becomes an increasingly influential player.

A recent report from Bloomberg Intelligence has raised concerns that up to 200,000 banking jobs could be at risk in the coming years, mostly due to automation taking over many routine tasks.

The report suggests that banks are bracing for an average workforce reduction of about 3 percent, particularly in positions that involve repetitive duties.

As the industry adapts, finding the right balance between advanced technology and the invaluable touch of human expertise will be essential for shaping the future of financial services, both in Việt Nam and around the world.

Customer service is one area likely to see a shift, with more interactions being handled by chatbots and automated systems.

Compliance procedures, such as the “know-your-customer” checks, are also likely to be streamlined through technology.

“AI shines in situations where tasks follow predictable patterns,” said Tomasz Noetzel, a senior analyst at Bloomberg Intelligence who contributed to the report.

“While it won’t completely eliminate jobs, it will definitely change the nature of work, altering roles rather than wiping them out entirely.”

However, not everyone is optimistic about the future.

Nearly 25 per cent of the executives surveyed believe that some banks may face steeper workforce cuts, ranging from 5 per cent to 10 per cent.

This indicates a more challenging outlook for parts of the banking industry as it navigates these changes. — VNS