SAIL modifies workforce reduction programme

With Steel Authority of India Ltd (SAIL) seeing a turnaround in 2003 and lining up ambitious targets for the future, the management is now going slow on its programme to downsize its workforce.

The restructuring programme of SAIL, launched in 2000, had aimed at reducing 10,000 workers each year to bring the headcount down to 100,000 by 2005.

But with the steel market cycle looking up and to support the company's plans for expansion, the downsizing is now likely to be in the range of 4,000-6,000 workers a year.

From 175,000 employees in 1998, SAIL's headcount has come down to 134,000 in January 2004 through natural separation, a voluntary retirement scheme (VRS) and divestment of the captive power plants situated at the site of the company's steel plants.

The VRS, in operation since 1998, has so far led to the reduction of 33,752 workers, while the total fall in employment (VRS plus natural retirement) is 49,071.

"Today, the labour productivity has improved to 136 tonne per man a year from 85 tonne per man a year in 1998," says Ashis Das, director (personnel), SAIL.

In order to achieve an optimal age mix in its workforce, the company has recruited about 4,500 people.

SAIL Chairman VS Jain is bullish on the rise in domestic steel demand, one of the deciding factors for its restructuring programme.

"Steel is going to grow by at least 7 per cent in the next three-four years," Jain said.

By 2011-12, SAIL aims to increase the output of hot metal to 20 million tonnes from the present 12 million tonnes.

This will entail an increased iron ore demand and the company aims at increasing the extraction of this mineral to 30 million tonnes from the present 22 million tonnes.

The current financial year will be a profit-making one for the company after five consecutive years of recording losses.

In 2003-04, SAIL has seen a turnaround and in the first half of the year the company recorded a profit of Rs 760 crore.

Rightsizing plans

• The restructuring programme of SAIL, launched in 2000, had aimed at reducing 10,000 workers each year to bring the headcount down to 100,000 by 2005
• The company is now likely to reduce 4,000-6,000 workers a year
• From 175,000 employees in 1998, SAIL's headcount has come down to 134,000 in January 2004