Iran faces mass layoffs war, internet shutdown and US blockade cripple economy

Iran’s economy is facing its worst unemployment crisis in decades, with the US-Israel-Iran war, a government-imposed internet shutdown, and a US port blockade pushing companies to the brink. Gholamhossein Mohammadi, an Iranian government official, estimated the conflict has already destroyed one million jobs and left two million more unemployed. A single day in April saw 318,000 job applications—50% higher than previous records—reflecting desperate labor market conditions. The digital sector, once a symbol of Iran’s economic potential, is suffering severe losses. The internet shutdown, enforced since the war began, has cost the country up to $80 million daily, according to an Iranian tech industry lobbying group. Digikala, Iran’s largest e-commerce platform, cut 200 jobs (3% of its workforce), while Kamva, another e-commerce firm, shut down entirely after months of instability. Founder Hadi Farnoud stated, ‘After two wars and months of internet shutdown, we could no longer bypass the crisis.’ Industrial sectors are also collapsing under US and Israeli strikes on petrochemical and steel plants, disrupting supply chains. A textile factory in western Iran laid off 700 of its 800 workers, while another in the north cut 500 positions. Many firms operate at minimal capacity, with contracts unrenewed and working hours slashed. Bahram Zonoubi Tabar, head of a local labor council in Fars province, noted that some factories ‘do not have real production’ and only function intermittently. Mehdi Bostanchi, head of the Coordination Council of Industries, warned the crisis could impact 3.5 million workers. Unlike typical recessions, job losses are hidden in nonrenewed contracts and reduced hours rather than official unemployment figures. The US-imposed port blockade has further choked imports, deepening the economic crisis across manufacturing and services.