As of January 31, 2025, around 1,600 employees of the Visakhapatnam Steel Plant (VSP) have applied for the Voluntary Retirement Scheme (VRS) introduced by Rashtriya Ispat Nigam Limited (RINL), the plant’s corporate entity. The scheme, which started on January 15 and closed at the end of January, is aimed at reducing the workforce, improving productivity, and optimizing human resource utilization. There are reports that the government is planning to privatize this stell plant.
The VRS is part of a larger plan by VSP management to decrease the number of permanent employees from the current 12,300 to 8,000 by December 2026. To qualify for the scheme, employees needed to have at least 15 years of service and be aged 45 or older. However, contract workers, casual employees, government staff on deputation, and those on study leave were not eligible to apply.
Although the central government recently announced a financial package of ₹11,400 crore to support the plant, many workers have decided to leave early due to dissatisfaction with the financial package, pressure at work, delayed salary payments, and health issues. Over the past four years, around 1,200 employees have resigned before the government’s strategic disinvestment proposal. Another 780 employees left prior to the launch of the VRS, and it is expected that around 1,000 more will opt for early retirement under the scheme, bringing the permanent workforce down to 9,900.
Trade union leaders have raised concerns about the plant’s financial difficulties, including severe cash flow issues, shortages of raw materials, and ongoing salary delays. They warn that the shrinking workforce could result in longer working hours and operational challenges, particularly as the plant plans to operate three blast furnaces by August 2025.
Currently, VSP employs a total of 27,000 individuals, including 14,000 contract workers. The ongoing reduction of the permanent workforce is part of an effort to address the plant’s financial troubles and improve its operational efficiency.
The high number of employees opting for the VRS highlights the challenges facing Visakhapatnam Steel Plant and the urgent need for more effective strategies to address employee concerns and ensure the plant’s long-term sustainability.
