Iran War with US, Israel Triggers Two Million Job Losses by November 2026
Iran’s Deputy Work and Social Security Minister, Gholamhossein Mohammadi, confirmed two days prior that two million individuals had lost their employment due to the conflict with the US and Israel. This significant wave of redundancies has become a central topic among ordinary Iranians on social media, with officials and employers referring to it euphemistically as "balancing the workforce."
Economic Fallout Across Sectors
The economic repercussions extend beyond factories directly damaged by airstrikes. Other manufacturing firms, retailers, import and export businesses, and the burgeoning digital sector have also been severely impacted. Social media users have observed the tangible effects, citing "emptiness of the metro," "abundance of parking spaces near the office," and reduced travel times on major highways as evidence of the widespread job losses.
Consumer spending has sharply declined, with many households prioritising essential goods. This shift has diminished demand in sectors such as tourism and restaurants. The Iranian authorities' decision to impose an internet blackout since the conflict began has further crippled Iran's tech and digital sectors. While officials cite security concerns, the measure mirrors previous actions during protests, aiming to restrict organisation and information access. In January, Iran's Information and Communication Technology Minister, Sattar Hashemi, stated that each day of internet blackout cost the economy at least 50 trillion rials (USD#35m). By this measure, 52 days of internet shutdown have cost the Iranian economy over USD#1.8bn.
The blackout has particularly affected female earners; official data indicates only one in nine working-age women were employed before the war, with hundreds of thousands relying on platforms like Instagram for commerce. Media outlets, including the Iran Labour News Agency (Ilna), have also shed staff, forcing journalists into freelance roles.
Industrial Collapse and Supply Chain Disruption
In late March and early April, US and Israeli strikes targeted two of Iran’s largest petrochemical plants in Asaluyeh and Mahshahr, alongside major steel manufacturers, Mobarakeh Steel and Khuzestan Steel. While tens of thousands directly lost their jobs, hundreds of thousands more are employed by firms supplying or relying on these industries. Iran’s extensive car manufacturing sector, which employs an estimated one million people, has reported widespread layoffs across its supply chain.
Disruptions in the Strait of Hormuz have compelled some factories to cease production and dismiss workers. An executive in Qom stated that their firm halted production due to material shortages, with foreign suppliers hesitant to ship goods to Iranian waters. Another report detailed a textile company firing 600 of 650 personnel, unable to import raw materials from Australia.
Companies are reportedly making redundancies with conditional rehiring promises or forcing unpaid leave. The government has introduced a loan scheme for small businesses, offering 440m rials (under USD#300) per worker, repayable in six months with an 18% to 35% interest rate, dependent on redundancy numbers.
This surge in unemployment coincides with an official inflation rate exceeding 50% in March 2026, with experts predicting further increases. Should the conflict persist or sanctions tighten, the economic downturn, heightened unemployment, and soaring prices are set to severely impact millions of Iranians.
