The International Monetary Fund (IMF) has directed Pakistan to proceed with further downsizing at the Utility Stores Corporation as part of its right-sizing initiative, with a deadline set for June 30.

According to sources, 2,237 daily-wage workers have already been let go in the first phase. In the second phase, around 2,800 contract employees from grades 1 to 13 will be dismissed, while staff from grade 14 and above will be shifted to the surplus pool.

In addition, the government has decided to close 1,000 underperforming Utility Stores by the end of the current fiscal year, reducing the total number from 5,500 to just 1,500. Daily-wage employees at the affected outlets will also be terminated. The remaining stores are scheduled for privatization, as per official documents.

Despite a Rs38 billion subsidy granted to Utility Stores in the last fiscal year, the Rs60 billion allocated for the current year has yet to be released.

This development comes ahead of the IMF Executive Board’s meeting scheduled for May 9, where Pakistan is expected to receive a $1.1 billion disbursement under its ongoing financial program. The agenda includes the first review under the Extended Fund Facility (EFF), proposed changes to performance criteria, and Pakistan’s request for support under the Resilience and Sustainability Facility (RSF).

Separately, Pakistan has secured $1.3 billion in climate financing from the IMF, as confirmed by IMF Director of Communications Julie Kozack during a recent press briefing.

Last month, Pakistan and the IMF reached a staff-level agreement on the first review of the $7 billion, 37-month EFF and the new $1.3 billion, 28-month RSF program.