The wave of layoffs in Vietnam's banking industry: The industry's pain and rebirth under digital transformation

In 2025, Vietnam's banking industry is undergoing an unprecedented transformation, with a wave of layoffs becoming the key word of the industry. According to Vietnamese media reports on May 5th, in the first quarter of 2025, many large banks continued the trend of layoffs. The number of employees at LPBank dropped to 9,570, a decrease of 1,619 compared to the beginning of the year, and the labor cost decreased by 8% year-on-year. Sacombank cut 970 employees. Although the labor cost increased by 6% instead, its leadership still stated that it would continue to selectively streamline. In addition, VIB and ABBank laid off 495 and 64 employees respectively. Looking back at 2024, Vietnam's banking industry has already witnessed large-scale layoffs. Many banks, including BIDV and ACB, have reduced their staff, with some banks cutting their workforce by nearly a thousand.

Behind this wave of layoffs lies the huge impact brought about by the rapid development of fintech. With the wide application of artificial intelligence, machine learning and automated systems in the banking industry, simple repetitive work is being largely replaced by technology. Take the account opening service as an example. In the past, about 10 people were needed to open an account at the counter. Now, customers can open an account independently through the digital banking application, and only 2 to 3 people are required for the relevant positions. Meanwhile, the rise of digital banking services has led to a reduction in the number of positions that originally required direct interaction, with traditional operational and administrative positions in banks being the first to be affected.

Against the backdrop of digital transformation becoming an irreversible trend, Vietnam's banking industry has been actively making plans for many years. By the end of 2022, the banking industry had allocated 15 trillion Vietnamese dong to invest in digital transformation activities. The Agricultural Bank of Vietnam has 20 million customers using payment deposit accounts and 15 million customers using electronic banking services. Every year, it invests a large amount of funds in building and applying information technology systems, and has also deployed digital banking services integrating modern technological applications. Since 2017, Military Commercial Joint-stock Bank has invested approximately 50 million US dollars annually in digital transformation.

In terms of the market competition landscape, Vietnam's retail banking industry is in a stage of transformation, and customers' preference for digital financial services has accelerated the digitalization process. Banks not only compete with each other, but also face the challenges of new pure digital banks. Digital payment methods dominate in Vietnam, with bank apps and e-wallets becoming the most popular payment options. The market landscape of traditional banks has been disrupted. MB Bank surpassed the traditional leader vietcombank in 2024 to become the market leader. The brand influence of traditional banks such as bidv, vietinbank, agribank and sacombank has declined, while pure digital banks like cake by vpbank and tnex have emerged and ranked among the top 20 in terms of brand influence.

Although the wave of layoffs in Vietnam's banking industry has brought about the pain of employee unemployment, in the long run, it is also an inevitable path for the industry to move towards modernization. Layoffs can help banks streamline their structure, reduce costs, allocate resources more rationally, and enhance their competitiveness in the digital age. Meanwhile, the demand for interpersonal interactive positions such as business consulting and sales in banks has increased, and the structure of talent demand has changed, which has also brought new directions to the job market.

In the future, the banking industry in Vietnam needs to enhance efficiency while balancing the protection of employees' rights and interests with the maintenance of service quality. On the one hand, we should continue to seize the opportunities of digital transformation, strengthen cooperation with fintech companies, and constantly innovate financial products and services. On the other hand, attention should be paid to the re-employment training and career development of employees. Through the joint efforts of the government, enterprises and social institutions, help the laid-off workers improve their skills and adapt to new employment demands, so as to achieve the smooth transformation and sustainable development of the banking industry.