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Steel Authority of India Limited (SAIL) would curtail the strength of its workforce to reduce the manpower cost of the company.
It had reintroduced the voluntary retirement scheme (VRS) which came into effect from May 1. It was almost after six years that SAIL came out with the offer to propel its employees to opt for voluntary retirement. The VRS scheme launched by the company in 2001-02 continued till 2008-09. When the scheme was launched, SAIL had a strength of more than 160,000 employees and the manpower cost accounted to nearly 16 per cent of the company’s gross sales — the highest among the steel makers.
It had reintroduced the voluntary retirement scheme (VRS) which came into effect from May 1. It was almost after six years that SAIL came out with the offer to propel its employees to opt for voluntary retirement. The VRS scheme launched by the company in 2001-02 continued till 2008-09. When the scheme was launched, SAIL had a strength of more than 160,000 employees and the manpower cost accounted to nearly 16 per cent of the company’s gross sales — the highest among the steel makers.
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Following the VRS and natural separation of employees, its manpower has been reduced to 88,655, of which 13,968 are executives and the remaining 74,687 being non-executives.
The SAIL spokesperson confirmed the company has initiated the process to reduce the manpower but did not share the details.
According to officials aware of the development, the scheme would be applicable for those employees who have worked for at least 15 years and whose minimum age is 50 years.
The compensation will consist of the salary of 45 days for every completed year of service or the salary an employee would draw at the prevailing level for the number of months’ of service left, whichever is less, the company’s VRS document said.
SAIL has continuously made losses during the first three quarters of the last financial year.
The result of the fourth quarter of FY16 is awaited. Even the profit has reduced in the last couple of years.
The company registered a net profit of Rs 2,093 crore in 2014-15 compared to Rs 2,616 crore in the previous financial year.
