The federal government has initiated steps to privatise the Utility Stores Corporation (USC), triggering widespread protests and the closure of hundreds of outlets across the country, sources confirmed on Monday.
In a major downsizing move, the USC administration has laid off over 2,800 small contract employees, while preparations are underway to forcibly retire more than 5,000 permanent staff members, according to officials familiar with the development. Sources further revealed that 509 additional contract workers are also expected to be dismissed in the coming weeks.
The decision, reportedly driven by a broader plan under the second phase of the federal government’s privatisation programme, has prompted severe backlash from employees, who have shut down utility stores nationwide in protest. Out of the 3,542 utility stores operating across Pakistan, nearly 1,800 have already been closed, sources confirmed.
Officials at the Ministry of Industries and Production said the workforce reduction is part of ongoing restructuring efforts, amid growing disinterest among employees in the voluntary separation or golden handshake schemes previously offered by the administration.
Sources told SAMAA that prior to the latest layoffs, USC had already terminated around 3,000 daily-wage employees. The total number of staff has now declined from 9,294 to 6,484, despite 654 daily wagers reportedly returning to their jobs after securing legal relief through the courts.
Among the total utility outlets, 2,539 are considered part of the regular store network, according to internal assessments.
In addition to the controversial layoffs, the Utility Stores Corporation is also facing serious financial challenges. Despite a federal allocation of Rs60 billion for the current fiscal year, including a Rs10 billion Ramadan relief package and a Rs50 billion regular grant, none of the funds have been disbursed so far, sources claimed.
Compounding these issues, the accounts of the Utility Stores Corporation for the financial years 2022–23 and 2023–24 remain unaudited. A financial adviser is expected to be appointed for the privatisation process only after the completion of a formal audit, officials said.
Privatisation of the USC has been included in the second phase of the government’s broader privatisation programme, according to the Privatisation Commission.
While no official statement has been issued by the government or the USC management, sources within the corporation expressed concern that the lack of transparency and the abrupt nature of the layoffs could lead to further legal challenges and public backlash.
“The abrupt dismissals without proper compensation or engagement with the workforce have created panic and uncertainty across the board,” said a senior USC employee on condition of anonymity. “This isn’t just about jobs; it’s about the future of public-sector retail and the affordability of basic commodities for low-income families.”
The move comes amid broader IMF-backed reforms aimed at reducing fiscal deficits and curbing public-sector losses. However, critics argue that such measures could disproportionately impact the poor, who depend heavily on utility stores for subsidised essential items.
