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

Iran's economy, already weakened by decades of sanctions and mismanagement, is haemorrhaging jobs at an accelerating pace as companies across the country's industrial and technology sectors shed workers in the wake of the US-Israeli war and a prolonged government-imposed internet shutdown.

An Iranian government official, Gholamhossein Mohammadi, estimated that the war has caused the loss of one million jobs, "and the direct and indirect unemployment of two million people." On 25 April, a leading Iranian job search platform recorded 318,000 resume submissions in a single day, a figure 50 per cent higher than the previous record, according to the news site Asr Iran.

The head of an Iranian tech industry lobbying group estimated the shutdown is costing the country up to 80 million US dollars a day in direct and indirect losses, as quoted by The New York Times.

Digikala, Iran's dominant e-commerce platform, has cut 200 employees, approximately three per cent of its workforce, with the company's chief executive, Masoud Tabatabaei, citing recent instability as a contributing factor. Last month, Hadi Farnoud, founder of the e-commerce firm Kamva, announced the company would cease operations entirely.

"After two wars and months of internet shutdown, we could no longer bypass the crisis," Farnoud said in a public statement. "This time, it was impossible to continue."

A textile factory in western Iran laid off 700 of its 800 workers, according to the Iranian Labour News Agency. Another factory in the country's north shed 500 positions. Even firms that have not announced formal redundancies are operating at minimal capacity, according to labour leaders.

"In practice, some of these units do not have real production and only work semi-actively or intermittently to maintain their existence," NYT quoted Bahram Zonoubi Tabar, head of a local labour council in Iran's Fars province.

Mehdi Bostanchi, head of the Coordination Council of Industries, placed the scale of the crisis in stark terms, warning that the industrial contraction would affect as many as 3.5 million workers.

"In this situation, unlike classic periods of recession, the decline in employment is less visible in official statistics and instead manifests through nonrenewal of contracts, reduced working hours, and forced leave," Bostanchi said.

The measure was intended as a lifeline for Iranian workers, but its immediate effect was felt differently on the employer side.

The wage increase "created a shock to the economy," The New York Times quoted Nima Namdari, chief executive of Karnameh, an online car sales company. "As a result, the wave of layoffs intensified."

Nationwide protests erupted in December as the rial collapsed, and were met with a deadly crackdown that killed thousands. The underlying economic grievances that drove those demonstrations have not been resolved.

The Iran government's proposed budget for the current year, drawn up before hostilities began, already factored in a sharp reduction in public spending in real terms and leaned more heavily on tax revenues than in previous years. With the private sector haemorrhaging jobs and output, those revenue projections have been rendered largely unreliable.

For its part, the Trump administration has framed Iran's economic distress as a deliberate lever of pressure. "I hope it fails," President Trump said of Iran's economy earlier this month. “You know why? Because I want to win.”