In the wake of escalating conflict and economic pressure, Iran’s workforce is facing widespread job losses and uncertainty, with layoffs spreading across multiple sectors amid ongoing U.S.-Israeli hostilities. The turmoil that began in earnest in mid-March has deepened after Iran's government imposed a near-total internet shutdown, crippling the country’s technology industry and triggering a cascade of corporate downsizing.

Babak, a 49-year-old product designer based in Tehran, illustrates the human cost of the crisis. After nearly two decades of steady employment and professional growth, he was recently laid off when his tech company eliminated his position. This marked his second layoff within a year, with the first occurring just days before Israel’s June 2025 strikes on Iranian territory. The combination of conflict, internet restrictions, and economic instability has severely disrupted his ability to secure stable work. Babak and his wife have exhausted significant personal assets and now depend on family support to get by.

The broader economic landscape in Iran is deteriorating rapidly. An Iranian official, Gholamhossein Mohammadi, cited by Tasnim news agency, estimated the ongoing conflict has resulted in the loss or direct unemployment of roughly three million people. The Iranian job platform Asr Iran reported a record surge in job seekers, with over 318,000 resumes submitted in a single day in late April—a 50 percent increase over previous peaks.

Iran’s private sector, already reeling from years of sanctions, corruption, and currency devaluation, is contending with a new array of challenges linked directly to political and military pressures. Since the beginning of the war, U.S. and Israeli attacks have targeted strategic Iranian industrial sites, including petrochemical and steel plants, depleting raw material supplies essential for manufacturing. Concurrently, a U.S.-enforced blockade on Iranian ports, implemented after last month’s cease-fire, has curtailed oil exports and disrupted imports, compounding input shortages.

Reports of layoffs and production slowdowns are widespread. A textile factory in western Iran reportedly laid off almost 90 percent of its 800 workers, while another facility in the north dismissed 500 employees. Labor leaders indicate that many factories remain nominally operational but are barely producing, with nonrenewal of contracts, reduced hours, and forced leaves becoming more common than outright dismissals.

The technological sector has been particularly hard hit by the internet blackout, a government measure that an industry lobbyist estimates is costing Iran up to $80 million daily in direct and indirect losses. Digikala, Iran’s largest tech company, announced job cuts affecting roughly 3 percent of its workforce, and Kamva, a prominent e-commerce firm, has ceased operations entirely, citing compounded effects of war and internet restrictions.

Economic experts warn that these developments portend a deepening crisis for Iran’s government, which had already proposed a budget with substantial spending cuts and heavier reliance on tax revenues before the conflict intensified. With shrinking private-sector income and growing instability, the government’s fiscal challenges are mounting.

Despite these pressures, Iranian authorities maintain that economic coercion will not force capitulation. Ayatollah Mojtaba Khamenei, the supreme leader, called on companies to minimize layoffs ahead of a national day honoring workers and teachers. However, many observers note that government policies themselves, including a recent 60 percent hike in the minimum wage, have exacerbated the fragility of businesses struggling to operate amid inflation and sanctions.

For millions of Iranians like Babak, the economic hardships wrought by conflict, international sanctions, and internal policy decisions have created a precarious existence, making daily survival a challenge and casting doubts on the country’s near-term economic recovery.