Iranian businesses said resorting to mass layoffs amid wartime economic struggles

According to New York Times, business leaders warn 3.5 million industrial jobs at risk, several tech firms shut down due to internet blackout, with others laying off hundreds

Businesses in Iran have resorted to mass layoffs due to the economic struggle caused by the war with the US and Israel and the ensuing blockade of the Strait of Hormuz, The New York Times reported Sunday, citing Iranian business sources.

According to the sources, dozens of major tech companies have laid off hundreds of employees across all sectors, with one labor leader saying some 3.5 million workers could be affected by the trend in Iran’s industrial sector alone.

The private sector struggles are signs of a “deepening crisis” for the regime, the report said, as mass layoffs and business closures will greatly decrease tax revenue, which the government has increasingly relied on during trade shutdowns caused by the war.

The report of mass layoffs comes as US President Donald Trump has opted to squeeze Iran’s economy through his blockade of the country’s ports, causing billions of dollars in lost oil revenue, with Trump saying he hopes the Iranian economy will collapse under pressure, and other American officials saying the US is “suffocating the regime.”

Iran’s new supreme leader, Ayatollah Mojtaba Khamenei, has tried to push back on the problem, urging companies to avoid layoffs “to the extent possible.”

However, his regime’s harsh wartime measures, especially its near-complete internet shutdown, have caused some $80 million in daily losses, the report said, citing the leader of an Iranian tech lobby.

Major Iranian digital commerce platform Digikala has laid off 200 workers, around a third of its staff, the report said.

Kamva, another e-commerce site, announced recently that it was shutting down entirely, with the company’s founder saying: “After two wars and months of internet shutdown, we could no longer bypass the crisis.”

But it is not just the internet shutdown that has contributed to mass layoffs, the report said, as the US and Israeli strikes on Iranian industrial sites during the war, including oil and gas facilities and raw material production, have crippled the country’s once-robust industrial sector.

The Times cited the semi-official Iranian Labor News Agency as saying that a major textile factory cut 700 of its 800 workers, and another laid off 500.

Other companies have greatly reduced or effectively frozen production, even if they have not formally announced shutdowns or mass layoffs, the report said, citing labor leaders.

This has manifested in reduced labor hours and forced leave, as well as non-renewal of business contracts, a local labor leader reported, saying that this type of recession is “less visible in official statistics.”

One Iranian job search platform reported a record 318,000 resumes submitted on April 25, a single-day figure some 50 percent higher than the previous record, the report said, citing an Iranian news site.

The regime has acknowledged the crisis facing the country, with senior government official Gholamhossein Mohammadi estimating that the war has cost one million jobs, “and the direct and indirect unemployment of two million people.”

But the regime’s measures, including an effort to raise minimum wage, have only backfired, according to the report, and some struggling Iranians have resorted to selling off their cars and jewelry to make ends meet.