Iran is facing a sharp rise in unemployment as the economic fallout from its conflict with the United States and Israel deepens. According to Gholamhossein Mohammadi, nearly two million people have lost their jobs, either directly or indirectly due to the war.
The job losses extend well beyond facilities damaged by air strikes. Entire sectors—including manufacturing, retail, import-export businesses and the digital economy—are affected. Officials often describe the situation as “workforce balancing,” but for many Iranians, the impact is visible in daily life, from quieter roads to reduced activity in public transport.
Consumer spending has also dropped significantly, as households cut back to essential goods. This has hit industries such as tourism, hospitality and non-essential retail, further compounding job losses.
Internet blackout worsens economic strain
The situation has been aggravated by prolonged internet restrictions imposed by authorities for security reasons. While officials argue the shutdown helps prevent cyber threats and espionage, it has severely disrupted business activity, particularly in the digital sector.
Earlier estimates by Sattar Hashemi suggested that each day of internet disruption costs the economy around $35 million. With more than 50 days of restricted access since the conflict began, losses are estimated to exceed $1.8 billion.
The impact has been especially severe for women, many of whom relied on online platforms to run small businesses. With limited workforce participation already, the disruption has cut off key income streams.
Key industries and supply chains disrupted
Major industrial sites have also been affected. Air strikes targeted critical petrochemical and steel facilities, leading to large-scale layoffs. The effects ripple through supply chains, impacting hundreds of thousands of additional workers.
Iran’s automotive sector, which supports around one million jobs directly and indirectly, has also reported layoffs due to shortages of raw materials and disrupted imports.
Shipping challenges in the Strait of Hormuz have further complicated trade. Some factories have halted production entirely as suppliers hesitate to ship goods to Iran amid security concerns.
Limited relief measures amid rising inflation
The government has introduced a loan scheme for small businesses, offering financial support per worker. However, the loans must be repaid within six months and carry relatively high interest rates, limiting their effectiveness.
These economic pressures come at a time when inflation has surpassed 50%, further eroding purchasing power. Analysts warn that if the conflict persists or sanctions tighten, the situation could deteriorate further.
For millions of Iranians, the combined effects of unemployment, inflation and economic disruption are creating a rapidly worsening cost-of-living crisis.
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