Pakistan will close 1,000 Utility Stores and cut thousands of jobs by June 30 following IMF’s cost-cutting demands. So far, over 2,200 daily-wage employees have already been laid off. In the second phase, 2,800 more contract workers from grades 1 to 13 will be removed. Higher-grade employees will be moved to a surplus pool.
Moreover, the total number of Utility Stores will drop from 5,500 to 1,500. These closures will affect daily-wage workers as well. The government also plans to privatize the remaining stores. Last year, Utility Stores received Rs38 billion in subsidy, but the current year’s Rs60 billion support remains pending.
This decision aligns with the IMF’s broader fiscal reforms. It also comes ahead of the IMF board meeting on May 9. The meeting will consider a $1.1 billion payment to Pakistan and a new $1.3 billion climate fund.
However, worker unions and the Lahore High Court have raised concerns over the shutdown. Many say it violates previous promises. Unions warn of protests, while a court case claims the closures are against the law and will hurt thousands of families.