Mass layoffs in Iran as companies succumb to war pressures

The Iranian government had cut off internet access two weeks earlier, at the start of the US-Israel war against the country, plunging the Iranian technology industry into chaos and making Babak’s work impossible.

“Throughout my career, I have worked hard, continually learned and tried to grow,” said Babak, who sent voice messages to The New York Times and asked to be identified only by his first name to avoid government retaliation.

“However, at this stage of my life, I find myself in an uncertain and ambiguous position,” he added.

Babak’s experience has become increasingly common across Iran as companies have carried out successive rounds of layoffs in recent weeks, according to interviews with businessmen and employees and Iranian press reports.

For the Trump administration, Iran’s dire economic difficulties are part of a strategy to pressure the country into submission.

“I hope it fails,” declared the president Donald Trump to the press this month, referring to the Iranian economy. «Do you know why? Because I want to win.

Iranian officials insist that pressure will not work and that the country will not give up.

Many of these companies are succumbing to the pressures of war.

During the conflict, the United States and Israel attacked Iranian industrial facilities that produce key raw materials as well as essential infrastructure.

In addition, the blockade imposed by the United States on Iranian ports, in place since last month’s ceasefire, has disrupted much of its oil exports and affected imports of other goods.

According to statements collected by the media outlet Tasnim, Gholamhossein Mohammadi, Iranian government official estimated that the war has caused the loss of a million jobs“and the direct and indirect unemployment of two million people.”

On April 25, an Iranian job search platform reported a record 318,000 resumes submitted in a single day, a figure that is 50% more than the previous record, according to the Asr Iran news website.

Even before the war, the Iranian economy was already suffering from years of sanctions, entrenched corruption and mismanagement, while the rapid devaluation of the currency had sapped Iranians’ purchasing power.

“A strange and overwhelming whirlwind of economic problems has emerged, which continues to become more and more complex,” Amir Hossein Khaleghi, an economist in Isfahan, said in an interview.

Before the war, Iran “was already in a very precarious economic situation, facing a series of megacrisis”he added.

The recent difficulties of the private sector portend a deepening crisis for the Iranian government.

Its annual budget, presented before the war, already represented a drastic reduction in public spending when adjusted for inflation, and was more dependent on taxes than in the past.

Now, private sector tax revenues are likely to decline significantly.

Economic discontent has sparked repeated protests in Iran over the past decade, including nationwide demonstrations that began in December following the currency collapse.

Although these protests were repressed with a brutal repression that left thousands dead, the anger that fuels them remains latent.

In a statement on the occasion of Iran’s national day honoring workers and teachers, Supreme Leader Ayatollah Mojtaba Khameneiurged companies to avoid layoffs “as far as possible.”

Many of these companies are facing deep crises that are a direct consequence of the actions of the Khamenei government.

For example, Iran’s digital sector, once a symbol of the country’s potential, has been crippled by a severe internet blockage imposed by the government.

The head of an Iranian technology industry lobby estimated that the internet blockade is costing Iran up to 80 million dollars a day in direct and indirect losses.

Digikala, known as the Amazon of Iran and the country’s main technology company, has laid off 200 employees, approximately 3% of its workforce, with recent instability being one of the causes, according to the company’s CEO, Masoud Tabatabaei.

Last month, the founder of Kamva, an Iranian e-commerce company, announced that the company would close permanently.

“After two wars and months without the internet, we could no longer avoid the crisis,” declared the founder, Hadi Farnoud, in a statement published on his account on the social platform X.

“This time, it was impossible to continue.”

In the industrial sector, the immediate cause of many layoffs is the shortage of raw materials.

Important petrochemical and steel plants were targeted by US and Israeli attacks on the country, disrupting supplies to related industries.

Additionally, imports have been affected by the US blockade of Iranian ports.

According to the semi-official Iranian Labor News Agency, a textile factory in western Iran has laid off 700 of its 800 workers.

The agency also reported that another factory in the north of the country laid off 500 employees.

According to union leaders, even manufacturers that have not announced formal layoffs are virtually paralyzed, remaining open in name only but with minimal production.

“In practice, some of these units do not have real production and only work semiactive or intermittent to maintain its existence,” Bahram Zonoubi Tabar, head of a local labor council in Iran’s Fars province, said in an interview with the news agency.

Mehdi Bostanchi, president of the country’s Industries Coordination Council, a body that liaises between companies and the government, said that the Iranian industrial sector is going through a contraction that will affect about 3.5 million workers.

“In this situation, unlike classic periods of recession, the decline in employment is less visible in official statistics and is instead manifested through non-renewal of contracts, reductions in working hours and forced furloughs,” Bostanchi said in a written response to questions from the Times.

At times, the government’s efforts to address the economic crisis have increased pressure on businesses.

In March, the government announced a 60% increase in the Iranian minimum wage, with the aim of keeping wages on par with the country’s rampant inflation.

However, according to Nima Namdari, CEO of Karnameh, an online car sales company, this “caused a shock to the economy.”

“As a consequence, the wave of layoffs intensified,” Namdari said.

Babak, the product designer, has been fired twice in the span of a year.

His first dismissal occurred just 10 days before the Israeli attack on Iran in June 2025, and it took him months to find a new job, with a lower salary.

According to him, they had a hard time making ends meet, but he and his wife managed.

Then came the war between the United States and Israel, the internet blockade, and his most recent firing.

He and his wife have sold their cars and jewelry to get by in recent weeks.

With nothing left to sell, he said, they now depend on the help from their families.

Babak said he has not yet been able to find another job. “It hurts me to see how this situation has affected my wife’s spirit,” he added. “There are times when we both have a hard time, but we are doing everything we can to remain hopeful.”

“It hurts me to see how this situation has affected my wife’s spirit,” he added.

“There are times when we both have a hard time, but we are doing everything we can to remain hopeful.”