The federal government of Pakistan has reportedly finalized plans to shut down the Utility Stores Corporation (USC) and has set 31st July as the official deadline, according to sources familiar with the matter.

Prime Minister Shehbaz Sharif issued the directive following a high-level meeting held on 28th June. As part of the closure strategy, the government will offer all USC employees a Voluntary Separation Scheme (VSS).

Sources say the authorities will permanently shut down Utility Stores outlets running at a loss, while they plan to transfer the remaining branches to private ownership.

The Privatisation Commission will oversee the process and manage the transition while regularly updating the Prime Minister on its progress.

The Ministry of Industries is also coordinating the execution of the wind-up plan.

The decision brings an end to the state-run retail chain, which has faced continuous financial losses for several years.

In May 2025, the International Monetary Fund (IMF) also directed Pakistan to terminate additional Utility Stores Corporation employees by June 30 as part of its right-sizing policy.

According to sources, authorities have already dismissed 2,237 daily-wage workers in the first phase. In the second phase, they plan to terminate approximately 2,800 contract employees from grades 1 to 13.

Sources also revealed that employees in grade 14 and above will be moved to a surplus pool by the same deadline.

The government has decided to shut down an additional 1,000 financially weak Utility Stores by the end of the current fiscal year, cutting the total number from 5,500 to 1,500.

Authorities will also terminate daily-wage workers employed at these stores. According to official documents, authorities have scheduled the remaining outlets for privatization.

Sources confirmed that although Utility Stores received a Rs38 billion subsidy last fiscal year, the government has not released the Rs60 billion allocated for the current year.

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