The war that the US and Israel are waging against Iran has caused economic damage everywhere. However, it appears to be more so in countries directly involved in the war, such as Iran and the Gulf states.
Reports emerging from Iran this week indicate that companies have been laying off employees en masse. This is not entirely surprising, considering the damage the missile strikes have caused to the infrastructure countrywide.
Even if the issue of security were set aside, the sheer destruction of production, education, and other facilities would be sufficient to cause layoffs. Once buildings have been rendered dysfunctional, no economic activity can continue.
Extent of Job Loss in Iran
According to Gholamhossein Mohammadi, Iran’s Deputy Minister for Work and Social Security, the ongoing war has cost the country 2 million jobs. Someone observed that the impact of job losses is even visible in the low number of people using public transport. Many remain at home.
The negative impact is also reflected in the reduced number of cars on the country’s highways. The observer on the road noted that it had taken half an hour to complete a journey that normally takes 90 minutes.
Switching Off the Internet Costs Jobs
The Iranian government’s decision to switch off the internet during this war period also seems to have exacerbated the situation. People who used to earn their living by working or transacting online are no longer productively engaged. Women are the most affected in this income-earning sector.
In its defense, the Iranian government has explained the internet blockage. It says it is meant to protect the country from cyber attacks, surveillance, and espionage.
The last time Iran shut down the internet was during the January 2026 mass protests. At that time, Iranians were protesting the increased cost of living.
The minister in charge of information and technology, Satter Hashemi, then estimated the daily cost of shutting down the internet at $35 million.
Based on that estimate, the current internet shutdown must have cost the country over $1.8 billion, with at least 52 days having passed.
Iran Labor News Agency (ILNA) Lays off All Journalists
Last week, Iran’s official news agency, the Iran Labor News Agency (ILNA), laid off all its journalists. The agency advised them to engage themselves as freelancers.
Other employees currently out of a job are those who used to work in facilities that were bombed during the war. They include employees of the two bombed Asaluyeh and Mahshahr petrochemical plants, Iran’s largest, and two bombed steel factories, Mobarakeh and Khuzestan.
More people have been rendered jobless in supply chains, including raw material suppliers. Consumers of these companies’ products have also been badly hit. One large car manufacturer, for instance, is said to have affected the incomes of a million people.
Other layoffs have taken place in the textile sector, tourism sector, small businesses, and elsewhere. Such layoffs have led to a drastic reduction in economic spending, with many people limiting their consumption to basic commodities.
Such economic deterioration may be one reason Iran is fed up with the war and its uncertainties. It is probably one of the reasons Iran’s Aerospace Commander recently issued a deadly threat to the US and its Gulf allies.
Meanwhile, Iran is not the only country suffering economically. The entire world is suffering due to the escalation in oil prices caused by the war. Others, such as the Gulf countries, are suffering from ruined infrastructure and insecurity. Hence, it is in the interest of everyone, including Iran, that the war in Iran comes to an end as soon as possible.