As of January 31, 2025, approximately 600 employees of the Visakhapatnam Steel Plant (VSP) have applied for the Voluntary Retirement Scheme (VRS) introduced by Rashtriya Ispat Nigam Limited (RINL), the corporate entity of VSP. The scheme, which commenced on January 15 and concluded on January 31, aims to rationalize manpower, optimize human resource utilization, reduce costs, and improve productivity. 

The VRS is part of a broader strategy by VSP management to reduce the number of permanent employees from the current 12,300 to 8,000 by the end of December 2026. Eligibility criteria for the scheme required employees to have at least 15 years of service and be aged 45 or above. Contract employees, casual workers, government employees on deputation, and individuals on study leave were not eligible. 

Despite the central government's announcement of a financial package worth ₹11,400 crore for the plant, many employees have opted for early retirement due to dissatisfaction with the package, work pressure, delayed salary payments, and health concerns. 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, potentially reducing the permanent workforce to 9,900. 

Trade union leaders have expressed concerns over the plant's financial struggles, including severe financial problems, lack of raw materials, and delayed salary payments. They warn that the reduced workforce may lead to increased work hours and operational challenges, especially with plans to operate three blast furnaces by August 2025. 

The VSP currently employs a total of 27,000 individuals, including 14,000 contract staff. The management's plan to reduce the permanent workforce is part of efforts to address the plant's financial difficulties and improve operational efficiency. 

The significant number of employees opting for VRS reflects the challenges faced by the Visakhapatnam Steel Plant and underscores the need for comprehensive strategies to address employee concerns and ensure the plant's sustainable operation.