Steel Authority of India (SAIL) is planning a major reduction in its contract workforce over the next year. The news reportedly came after an internal communication that has sparked concern among labour unions over job security, industrial safety, and the wider economic impact on steel townships.
The internal letter, dated 18 April, 2026, was sent by Krishna Kumar Singh, director (personnel), *Priya Ranjan*. It outlined a target to reduce the company’s contract workforce by an additional 20 per cent during FY27. Combined with reductions already carried out in FY26, the move would lead to an overall 40 per cent cut by 31 March, 2027.
The communication stated that SAIL had already achieved an 18.8 per cent reduction in contractual manpower against its earlier target of 20 per cent during the previous financial year. The latest decision reportedly followed discussions held at the Ministry of Steel level, where continued workforce rationalisation was advised.
At Bokaro Steel Plant, contract worker strength is expected to fall from 12,798 in April 2025 to 7,678 by April 2027. This would mean the reduction of more than 5,000 contract workers over two years, including around 2,552 in the next phase alone. Similar targets have also been assigned to SAIL Refractory Unit operations.
The move has drawn criticism from unions affiliated with Bharatiya Mazdoor Sangh. Worker representatives have argued that the decision was communicated without prior consultation and could create anxiety among thousands of families dependent on plant-linked jobs.
Unions have also flagged safety concerns, warning that a sharp reduction in manpower in operational areas could increase pressure on the remaining workforce and raise the risk of accidents. They have urged SAIL to pause implementation until consultations and safety reviews are completed.
Apart from employment concerns, the cuts could affect local economies around steel plants, particularly in cities such as Bokaro, where businesses and households rely heavily on industrial activity generated by the plant ecosystem.
The unions have instead proposed alternative cost-control measures, including energy optimisation, reducing administrative expenditure, improving vigilance systems, and increasing revenue through recycling and by-product sales. SAIL has not yet publicly responded to the concerns raised by the unions.
