Utility Stores Corporation Announces Termination of All Employees

The Utility Stores Corporation (USC) has formally announced the termination of its entire workforce, effective September 1, 2025, under a major government-backed restructuring plan.

According to a circular issued by USC, a total of 11,406 employees will be laid off, with each eligible for a severance package approved by the government. The move comes as part of a decision to wind down the state-run retail chain after decades of operation.

Rs. 25.5 Billion Package Finalized

Official documents confirm that the Ministry of Industries has set aside a comprehensive Rs. 25.5 billion package to cover payments to permanent, contract, and daily-wage staff. The allocation also includes financial assistance for widows of deceased employees as well as institutional closure costs.

The package has been structured to provide different benefits based on years of service:

• Employees with up to 2 years of service → full salaries for their remaining months.
• Employees with over 20 years of service → two basic salaries for every completed year.
• Employees with less than 20 years of service → either three basic salaries for each completed year or 1.25 times the current basic salary for the remaining service months, whichever is higher.

Workforce Breakdown & Allocations

The USC currently employs 5,229 permanent staff, 3,323 contract workers, and 2,854 daily wagers. The funds have been divided as follows:

• Regular employees → Rs. 13.18 billion
• Contract employees → Rs. 3.6 billion
• Daily wage workers → Rs. 2.71 billion
• Widows & closure costs → Rs. 5.75 billion

Package Details by Employee Category

Regular Employees

• Those with two years or less to retirement → Rs. 357 million allocated; each of the 230 employees to get approx. Rs. 1.52 million.
• Those with over 20 years of service → Rs. 2.21 billion reserved; each to receive around Rs. 3.44 million.
• Those with under 20 years of service → Rs. 10.61 billion allocated; each worker to get approx. Rs. 2.43 million.

Contract Employees

• Those with two years of service remaining → Rs. 17 million set aside; each of the affected staff to receive about Rs. 414,000.
• Those with over 16 years of service → Rs. 2.97 billion allocated; average payout Rs. 1.127 million per worker.
• Those with up to 16 years of service → Rs. 611.5 million reserved; each entitled to Rs. 947,000.

Wind-Up Costs

Apart from employee settlements, an additional Rs. 5.75 billion has been earmarked for organizational wind-up expenses, including support measures for widows of deceased USC workers.

This development marks the end of an era for USC, once considered the backbone of subsidized consumer goods distribution across Pakistan. While the severance package provides some relief to thousands of families, the closure is expected to have a significant socio-economic impact.