1,50,000 jobs cuts in Pakistan: Here’s why India’s neighbour abolishing 60% of vacant positions

For the second time in less than six months, Pakistan has decided to abolish 60% of vacant positions in order to reduce the federal government's size and expenses amid ongoing financial crisis.

Pakistan is also planning to transfer some hospitals to provincial administrations.

“The federal government has decided to cut the number of affiliated agencies by half, abolishing 150,000 jobs,” reported PTI, quoting Finance Minister Muhammad Aurangzeb.

Aurangzeb added that 80 departments have been consolidated into 40.

The government has taken sweeping cost-cutting measures to rationalise expenditures and improve performance.

The initiative was launched in mid-2024 by a committee formed under Prime Minister Shehbaz Sharif.

The committee was to look into 43 ministries and their subordinate agencies. He said that the federal government’s annual expenditure on these departments was ₹900 billion, said the minister.

He said that the six ministries that the government had initially selected for right-sizing included Kashmir Affairs and Gilgit-Baltistan, States and Frontier Regions (SAFRON), IT and Telecom, Industries and Reproduction, National Health Services and Capital Development Authority (CAD).

He said that the Ministry of Kashmir Affairs, Gilgit-Baltistan and SAFRON are being merged and CAD is being abolished.

On plans to transfer hospitals to provincial administrations, the minister said that “This is not just about cutting costs; it’s about improving efficiency.”

Aurangzeb said that the government’s focus on macroeconomic stability helped the key indicators to improve and Pakistan was standing at a promising economic juncture due to various government efforts.

The size of the Pakistani government came into the crosshairs after the sharp increase in expenditures and questions were being raised over it.

The current government has been taking steps and reducing the size and expenses. It abolished the traditional pension system for government employees last year and reduced the pension benefits for the current employees.