Iran has been hit by a massive wave of redundancies, both directly and indirectly as a result of the conflict with the US and Israel. Its Deputy Work and Social Security Minister, Gholamhossein Mohammadi, said two days ago that two million people had lost their jobs because of the war.
The widespread layoffs are one of the biggest topics of conversation among ordinary Iranians on social media. Employers and government officials euphemistically refer to it as 'balancing the workforce'. The impact goes far beyond factories closed down after being hit by air strikes. It also includes other manufacturers, retailers, import and export businesses, and the digital sector.
You can see it from the emptiness of the metro, posted one user on X. You can see it from the abundance of parking spaces near the office, said another. You can get it from the emptiness of the Hemmat [highway in Tehran]. My one-and-a-half hour journey took only half an hour, came another comment.
The war has also had a negative impact on consumer spending, with many people cutting back to essentials, which has reduced demand in sectors such as tourism, restaurants, and retailers other than groceries. The Iranian authorities' decision to impose an internet blackout since the war broke out has also hit Iran's relatively thriving tech and digital sectors.
Officials say the decision to shut down the internet was taken for security reasons, suggesting that it is to prevent surveillance, espionage, and cyber-attacks. It took the same step during the brutal clampdown of protests earlier this year, which was mainly aimed at restricting protesters' ability to organize and access information.
Back in January, Iran's Information and Communication Technology Minister, Sattar Hashemi, said that every day of internet blackout cost the economy at least 50 trillion rials ($35 million). By that count, the 52 days of internet shutdown since the start of the war have cost the Iranian economy more than $1.8 billion.
The blackout has particularly hit female earners. Only one in nine working-age women in Iran were in work before the war, according to official data, and hundreds of thousands of women relied on platforms such as Instagram to connect with their customers to sell products.
Even at a time when there is increased demand for news as a result of the conflict, many media outlets have also shed their workers. This includes the Iran Labour News Agency (ILNA) that made all its journalists redundant last week and asked them to work as freelancers.
In late March and early April, the US and Israel hit two of Iran's largest petrochemical plants, as well as two of the largest steel manufacturers. While tens of thousands of people lost their jobs directly, hundreds of thousands more work in firms that either supply these key industries or those that rely on them for raw materials.
For example, Iran's huge car manufacturing sector, which is estimated to directly or indirectly employ one million people, has seen layoffs across its supply chain. Additionally, disruptions in the Strait of Hormuz have forced some factories to shut and let go of workers.
Reports indicate that some companies are making redundancies with the promise of rehiring as soon as conditions improve, while others are compelling their employees to take unpaid leave. The government has announced a loan scheme for small businesses of 440 million rials (less than $300) per worker, which must be paid back in six months with an interest rate based on the number of redundancies.
This wave of unemployment across different sectors comes at a time when the official inflation rate surpassed 50% in March 2026, and many experts believe it is likely to increase in the coming months. If the war resumes or Iran remains under strict international sanctions, life could get significantly harder for tens of millions of Iranians. Air strikes alone will have devastating consequences, but an economic downturn, heightened unemployment, and runaway prices could deepen the crisis considerably.
