The International Monetary Fund (IMF) has recommended that Pakistan undertake a substantial reduction of the workforce at the Utility Stores Corporation (USC) and close unprofitable outlets by the conclusion of June 2025. This directive comes as part of conditions tied to ongoing financial aid programs, including a $7 billion Extended Fund Facility (EFF) and a $1.3 billion Resilience and Sustainability Facility (RSF).
Under this mandate, over 2,800 contract workers from grades 1 to 13 are to be laid off in the next phase, following an earlier removal of 2,237 daily wage staff. Higher-grade employees (grade 14 and above) will be moved to a surplus pool, effectively sidelining them.
Approximately 1,000 inefficient utility stores will be shuttered as part of the restructuring process, reducing the overall count from 5,500 to 1,500. The remaining outlets are expected to be privatized.
Despite giving USC Rs38 billion in subsidies last year, the government has yet to provide the Rs60 billion that was set aside for the current fiscal year. These reforms and their implications will be central to Pakistan’s review meeting with the IMF Executive Board on May 9, where the release of a $1.1 billion tranche will be discussed.
