An internal communication issued by Steel Authority of India Limited (SAIL) has revealed plans to reduce its contract workforce by 40% by March 31, 2027, triggering concern among worker unions over possible livelihood, safety, and economic impacts.
The internal letter dated April 18, 2026, reviewed by India Today, was sent by Director (Personnel) Krishna Kumar Singh to Bokaro Steel Plant Director-in-Charge Priya Ranjan.
The internal communication stated that SAIL had earlier communicated targets for “rationalisation of contracts and contract workers” in integrated steel plants in the works and non-works areas through letters issued in 2025.
The letter further stated:
“Further, vide letter dated 12.02.2026, it was also communicated that the reduction of contractual workforce by at least 20% has to be achieved at SAIL level and not only by the five (5) Integrated Steel Plants. Accordingly, SAIL has already achieved a reduction of approximately 18.8% in contractual workforce against the target of 20%, with Integrated Steel Plants fulfilling the stipulated targets for reduction during the Financial Year 2025-26.”
The communication also referred to deliberations held at the level of Secretary (Steel) in the Ministry of Steel.
“As you are aware, during recent deliberations held at the level of Secretary (Steel) in the Ministry of Steel, it has been decided that rationalisation of contract workforce needs to be continued during the 2026-27 also,” the letter stated.
It added:
“Accordingly, a target of reduction of additional 20% of contractual workforce based on the assessed strength as on 01/04/2025 has been assigned to be achieved by 31/03/2027 i.e. overall reduction of 40% of contract workforce.”
The document directed all plants and units to take “necessary actions” to ensure the overall reduction target was achieved by March 31, 2027. It also asked units to formulate a detailed implementation plan by April 30, 2026.
The internal document also mentioned specific targets for Bokaro Steel Plant (BSL) and SRU (SAIL Refractory Unit).
For Bokaro Steel Plant, the contract workforce strength was listed at 12,798 as of April 1, 2025. It was shown at 10,230 as of April 1, 2026, with a target to bring it down further to 7,678 by April 1, 2027. This implies a proposed reduction of 2,552 workers in the next phase.
For SRU, the contract workforce strength was listed at 1,956 in both 2025 and 2026, with a target to reduce it to 1,173 by April 1, 2027. This indicates a reduction target of 783 workers.
The proposed workforce reduction has drawn opposition from Bharatiya Mazdoor Sangh (BMS)-affiliated unions.
In a representation dated April 23, 2026, Bharatiya Ispat Mazdoor Mahasangh (BIMS), an industrial unit of BMS, said the move could create a “climate of fear and insecurity” among workers.
“We think circulating any orders or any changes in policy matters related to the workers, without any prior discussion with the Trade unions, creates a ‘climate of fear and insecurity’ among the thousands of workers who depend on plants for their livelihood,” the union said in its letter to SAIL management.
The union also raised concerns over industrial safety.
“A drastic 40% reduction in manpower, especially in ‘Works’ areas, raises serious concerns regarding plant safety. Overburdening the remaining workforce can lead to fatigue-related accidents and equipment mismanagement,” the union stated.
In another letter dated April 26, 2026, Bharatiya Mazdoor Sangh (BMS) General Secretary Surendra Kumar Pandey urged SAIL management to reconsider the move.
“Implementing such a significant decision without transparent dialogue instills a profound sense of fear and insecurity among the workforce,” Pandey wrote.
The union also claimed that the removal of over 3,000 workers from the Bokaro ecosystem could negatively impact local businesses and families dependent on the plant. It further raised concerns regarding possible legal implications under the Contract Labour (R&A) Act, 1970 and Industrial Disputes Act, 1947.
The union has asked SAIL to pause implementation of the reduction targets pending consultations and safety audits involving worker representatives.
Instead of large-scale workforce rationalisation, the union suggested alternative cost-saving measures such as reducing administrative overheads, energy optimisation, better vigilance systems, and increasing revenue through recycling and by-product sales.
India Today has reached out to SAIL seeking comment on the proposed workforce reduction and the concerns raised by unions. The story will be updated once a response is received.