In its official circular, the management stated that the VRS aims to rationalize manpower, optimize human resource utilization, reduce costs, and improve productivity.
The significant number of applications has surprised many, especially following the central government’s announcement of a financial package worth ₹11,400 crore for the plant. However, KVD Prasad, General Secretary of the Steel Executive Association, explained that employees are dissatisfied with the package and cited reasons such as work pressure, delayed salary payments, and health concerns as key factors behind their decision to opt for early retirement.
Prasad also highlighted the ongoing human resources crisis at the plant. Over the past four years, approximately 1,200 employees resigned before the government’s strategic disinvestment proposal, 780 left prior to the VRS launch, and another 1,000 are expected to leave under the scheme. This will bring the permanent employee strength down to 9,900, significantly lower than other steel plants in the country.
“The reduced workforce can only operate two blast furnaces. When the third blast furnace becomes operational in August this year, employees will need to work over 16 hours daily to manage all three,” Prasad warned. He further pointed out that other steel plants, like SAIL, employ 2,700 workers per million tons of production, whereas VSP operates with only 1,700 employees, a number expected to decrease further.
Additionally, younger employees have been leaving VSP for better opportunities in other steel aplants across the country, adding to the workforce shortage.
According to Janshakti Mazdoor Sabha General Secretary Varasala Srinivas, the steel plant once had a turnover of ₹28,000 crore and an operational profit of ₹940 crore when the central government announced its disinvestment plan for RINL in January 2021. At that time, the plant was producing 7.3 million tons of steel annually, a figure that has now dropped to 1.5 million tons.
