Iran is grappling with a severe economic downturn as the ongoing conflict with the United States and Israel has led to widespread job losses and soaring inflation, according to recent reports. Deputy Work and Social Security Minister Gholamhossein Mohammadi revealed that approximately two million people have been made redundant as a direct or indirect result of the war.
"You can see it from the emptiness of the metro," one social media user observed, while another noted, "My one-and-a-half hour journey took only half an hour due to the lack of traffic on Tehran's Hemmat highway."
The layoffs extend beyond factories damaged by airstrikes to include manufacturers, retailers, import-export businesses, and the digital sector. Consumer spending has plummeted, with many Iranians cutting back to essentials, further reducing demand in tourism, restaurants, and non-grocery retail.
A significant blow has been dealt to Iran's tech industry due to an internet blackout imposed by authorities for security reasons since the war began. Information and Communication Technology Minister Sattar Hashemi previously stated that each day of internet shutdown costs the economy at least 50 trillion rials ($35 million). With 52 days of blackout so far, the cumulative loss exceeds $1.8 billion.
This shutdown has disproportionately affected female earners, hundreds of thousands of whom relied on platforms like Instagram to connect with customers. Only one in nine working-age women were employed before the conflict, official data shows.
Media outlets have also been forced to cut staff, with the Iran Labour News Agency (Ilna) making all its journalists redundant last week and offering freelance contracts instead.
Recent U.S. and Israeli strikes on key industrial sites—including petrochemical plants in Asaluyeh and Mahshahr and steel manufacturers Mobarakeh Steel and Khuzestan Steel—have resulted in tens of thousands of direct job losses. Hundreds of thousands more in supply chains and dependent industries have been affected.
Iran's automotive sector, which employs about one million people directly and indirectly, has reported widespread layoffs across its supply chain. Disruptions in the Strait of Hormuz have forced additional factory closures, with one executive in Qom province explaining, "We cannot even get materials loaded on ships, as foreign suppliers fear their vessels won't be permitted into Iranian waters."
Some companies are promising to rehire workers when conditions improve, while others are imposing unpaid leave. In response, the government has introduced a loan scheme for small businesses offering 440 million rials (less than $300) per worker, repayable within six months at interest rates of 18% to 35%, depending on the number of redundancies.
This unemployment surge coincides with an official inflation rate exceeding 50% in March 2026, which experts warn could rise further. If the war continues or international sanctions remain strict, the economic crisis is expected to deepen, affecting tens of millions of Iranians through increased joblessness and runaway prices.