Iran Sees Mass Redundancies from War with US and Israel
Behrang Tajdin, Economics Correspondent, BBC Persian
8 hours ago
Soaring inflation and escalating job losses are intensifying the crisis in Iran. The ongoing conflict with the US and Israel has precipitated a dramatic surge in redundancies. Gholamhossein Mohammadi, Iran’s Deputy Minister for Work and Social Security, recently reported that two million people have lost their jobs due to the war.
The Impact of War on Employment
The widespread layoffs have turned into a significant topic of discourse among everyday Iranians on social media. Employers and officials often refer to these layoffs as “balancing the workforce.” The repercussions extend beyond factories directly struck by air strikes, affecting numerous industries:
– Manufacturers
– Retailers
– Import and export businesses
– Digital sector
This shift is palpable in daily life. Comments on social media reflect the stark changes:
– You can see it from the emptiness of the metro, one user noted.
– There are more parking spaces near the office, stated another.
– My one-and-a-half-hour commute now takes only half an hour, shared a third.
Consumer Spending and Economic Activity Declines
The war has severely curtailed consumer spending, leading many to focus solely on essentials. This decline in demand has adversely affected:
– Tourism
– Restaurants
– Retail sectors, excluding groceries
Moreover, authorities have imposed an internet blackout since the onset of hostilities, impacting Iran’s burgeoning tech sector. Officials claim the shutdown, a move made for security reasons, aims to prevent surveillance and cyber-attacks. This tactic mirrors earlier efforts during violent protests aimed at stifling information access and organization.
Back in January, Sattar Hashemi, Iran’s Information and Communication Technology Minister, disclosed that each day of internet blackout costs the economy approximately 50 trillion rials (around $35 million). With the blackout lasting 52 days since the war began, the financial toll on the Iranian economy has exceeded $1.8 billion.
The Strain on Vulnerable Groups
The shutdown has significantly affected female earners. Prior to the conflict, only one in nine working-age women in Iran had jobs. Many relied on platforms like Instagram to reach customers and manage sales. Ironically, as the demand for news grows due to the war, media outlets have laid off staff, including the Iran Labour News Agency, which recently made all its journalists redundant, transitioning them to freelance roles.
Industrial Disruption and Job Losses
In late March and early April, US and Israeli airstrikes targeted two of Iran’s largest petrochemical plants—Asaluyeh and Mahshahr—and significant steel manufacturers like Mobarakeh Steel and Khuzestan Steel. While tens of thousands have lost their jobs directly, countless others work in supporting industries reliant on these key sectors.
For instance, Iran’s automotive industry is estimated to employ one million people directly or indirectly, with numerous layoffs reported throughout the supply chain. The disruption in the Strait of Hormuz has led to the closure of some factories, exacerbating job losses.
An executive from a manufacturing firm in Qom shared their struggles, stating, “We hoped things would return to normal once the war ended. However, we can’t even secure shipments, as our foreign suppliers fear their vessels won’t be allowed into Iranian waters.”
Reports indicate that some companies are offering temporary layoffs with promises of reemployment when conditions improve, while others are enforcing unpaid leave.
Government Response and Future Outlook
The Iranian government has introduced a loan scheme for small businesses, offering 440 million rials (less than $300) per worker, which must be repaid in six months at an interest rate between 18% and 35%, based on redundancy levels.
This surge in unemployment across various sectors coincides with an official inflation rate surpassing 50% in March 2026. Many experts predict a further increase in inflation rates. Should hostilities resume or if Iran remains under stringent international sanctions, the situation could worsen for millions of Iranians.
Air strikes not only pose immediate dangers but also trigger economic downturns, soaring unemployment, and skyrocketing prices, all of which could deepen this multifaceted crisis.