Iran’s private sector collapses as war, inflation and internet blackout trigger mass unemployment
Official figures confirm over one million job losses since the conflict began, while independent estimates suggest the internet shutdown alone costs the economy $80 million daily, pushing millions closer to the poverty line.
Iran’s private sector is facing imminent collapse following a convergence of military conflict, hyperinflation, and an international internet blackout that has persisted for more than 75 days. Since the United States and Israel launched attacks on 28 April, the Iranian currency has depreciated by 60 per cent, while essential goods have seen price increases ranging from 170 per cent to over 400 per cent. The economic shock has resulted in the loss of at least two million jobs, with the private sector described by business owners as effectively dead.
Deputy Work Minister Gholamhossein Mohammadi confirmed that official figures cite over one million job eliminations since the onset of hostilities. However, independent experts present a more severe picture, estimating that more than 20 million Iranians—more than one in four people—rely on the internet for their livelihood. The Iran Cyber Commerce Union reports that startups have lost between 25 and 70 per cent of their revenue since the war began, with the internet shutdown alone costing the economy approximately $80 million per day.
The technology sector, a significant employer of university graduates, is undergoing rapid contraction. Major startup Digikala recently laid off more than 2,000 employees, with many roles being replaced by artificial intelligence. Saman, the CEO of a small B2B startup, reported laying off 25 of his 28 staff due to a loss of customers and an inability to sustain payroll. He noted that remaining public sector orders are often unpaid for months, forcing skilled workers into lower-paid gig economy roles such as delivery driving.
Inflation has severely impacted household purchasing power, with rice prices increasing by more than 300 per cent and oil by more than 400 per cent over the last 19 months. Middle-class Iranians report that savings are being depleted to afford basic food, with a retired woman noting that a small chicken now costs 900,000 tomans, far exceeding her monthly pension of 15 million tomans. The Iran Welfare Organisation states that more than 34 million Iranians were already living below the absolute poverty line before the conflict, a figure that experts say is rising rapidly.
The economic distress has reignited fears of social unrest, echoing the anti-regime protests of January 2026 which resulted in more than 35,000 deaths according to human rights organisations. Business owners describe a scenario where daily survival takes precedence over commerce, with one e-shop owner reporting zero turnover for four months. With the currency at its lowest value globally and no end to the blockade in sight, analysts warn that the depletion of household savings could trigger further widespread instability.
