New York Times: War Drives Iranian Economy Toward Mass Layoffs and Corporate Collapse

Iran’s business sector is experiencing mass layoffs and an unprecedented wave of corporate collapse, according to a report by The New York Times. The newspaper attributes the crisis to the pressures of the US-Israeli war, a naval blockade, and internet blackouts enforced by the Iranian government.

The Iranian economy, already grappling with severe crises before 2026, has suffered a crippling blow that has paralyzed entire industries and eliminated millions of jobs, the report states. This situation threatens to intensify social and political unrest across the country.

The Times profiles one Iranian citizen, Babak, a 49-year-old product designer at a tech company in Tehran. He was laid off in mid-March after the government cut internet access two weeks into the war, making his job impossible to perform. “Throughout my career, I worked hard, I learned constantly, and yet, at this stage of my life, I find myself in a vague and worrying situation,” Babak told the newspaper. The report notes his experience is becoming increasingly common as companies execute successive rounds of layoffs.

The newspaper points out that the Trump administration views these economic hardships as part of a strategy to force Iran into submission. Trump has stated he hopes the Iranian economy fails because he “wants to win,” while Iranian officials insist their country will not surrender.

Industrial Paralysis and Million-Level Unemployment

According to the report, numerous Iranian companies are collapsing under the strain of the ongoing war. The United States and Israel have struck Iranian industrial sites producing key raw materials, as well as targeting vital infrastructure.

The American blockade of Iranian ports, in place since last month’s ceasefire, has cut off most oil exports and disrupted imports of other goods.

Iranian government official Gholam Hossein Mohammadi estimates the war has caused the loss of one million jobs, with two million people affected by direct and indirect unemployment, the newspaper reports. On April 25, an Iranian job-search platform recorded a record 318,000 CV submissions in a single day, a 50% increase over the previous record.

Accumulating Crises and Tech Sector Losses

Economist Amir Hossein Khaleghi told the Times that “a strange and overwhelming spiral of economic problems has emerged and continues to grow more complex.” He noted Iran was already facing “a set of major crises” before the war due to years of sanctions, corruption, and mismanagement.

The newspaper suggests the private sector’s struggles signal a deeper crisis for the government, as tax revenues are likely to drop sharply. Economic discontent has fueled repeated protests over the past decade, including demonstrations in December as the currency collapsed, the report adds.

Despite Supreme Leader Mojtaba Khamenei’s plea for companies to avoid layoffs “as much as possible,” the tech sector has been severely hit by the government’s internet blackout, which costs Iran up to $80 million daily. This prompted Digi Kala, known as “Iran’s Amazon,” to lay off 200 employees. Hadi Farnoud, founder of e-commerce company Kamfa, announced the complete closure of his firm, saying, “After two wars and months of internet cuts, it was impossible to continue.”

Raw Material Shortages and Counterproductive Government Measures

In the industrial sector, a shortage of raw materials resulting from the bombing of petrochemical and steel plants has led to layoffs. A textile factory in western Iran let go of 700 of its 800 workers, and another factory in the north dismissed 500 employees.

Labor leaders confirmed that some factories operate in name only. Bahram Zanoubi Tabar, head of a labor council in Fars province, said some units function at a semi-active level just to maintain their existence.

Mehdi Bostanji, head of the Industries Coordination Council, told the Times that the industrial sector’s contraction will affect up to 3.5 million workers. He explained the decline is visible in the non-renewal of contracts and reduced working hours.

The newspaper adds that a 60% increase in the minimum wage in March to combat inflation created a “shock to the economy” and intensified the wave of layoffs.