The Iranian labor market is currently facing a severe crisis characterized by surging unemployment and a shrinking workforce. This economic deterioration follows a period of conflict involving the United States and Israel, leaving millions of citizens struggling to maintain their livelihoods.
Widespread Job Losses and Industrial Collapse
National data indicates a staggering impact on employment, with Viceminister of Labor, Cooperation and Social Welfare Gholamhosein Mohamadi reporting the loss of 1 million direct jobs and 2 million indirect jobs due to the war.
In the city of Rasht, at least 2.000 workers were laid off within the last two months. Local reports highlight a trend of dismissals across the service, industrial, and production sectors.
Specific losses in Rasht include approximately 500 employees from Paya Modern, 490 from Pink, 190 from Gilara, and 55 from a poultry plant. Layoffs were also recorded at units such as Darougar Rasht.
Nationally, an estimated 135.000 jobs were lost directly during the war. Nearly 1 million people exited the labor market, though approximately 300.000 have since returned to formal employment, while 200.000 new applicants have sought unemployment insurance.
Economic Drivers of the Crisis
The regime estimates that the offensive by U.S. And Israeli forces caused USD 270.000 million in damages, affecting nearly 3.000 industrial infrastructures. This includes the closure of 50 petrochemical plants.
The Mobarakeh steel plant, the country’s primary steel facility, is expected to accept at least one year to return to normal capacity. Temporary export bans have been implemented in both the steel and petrochemical sectors.
Inflation has reached 71% with some food products seeing price increases of 100%. These price hikes are affecting basic goods such as dairy, as well as textiles, piping, and plastics.
Pressure on the Population
The human cost extends beyond unemployment. The NGO Activists for Human Rights in Iran (HRANA) documented 2.458 cases of layoffs and 3.761 workers in uncertain labor conditions in its 2025 report.
HRANA also recorded 638 months of unpaid or delayed salaries across 182 service and industrial units. This follows a period of intense social unrest in December and January, where repression led to at least 7.000 deaths.
In Tehran’s Tajrish bazaar, commerce has resumed, but sales remain low. Reza, a fruit and vegetable vendor who endured 39 days of consecutive bombings in the capital, stated that they are only alive
and expressed fear of future attacks.
Future Outlook and Risks
The economic stability of the region remains fragile. The construction sector, which employs 3,8 million Iranians, and the automotive industry continue to feel the impact of the conflict.
Hadi Kahalzadeh of the Quincy Institute warns that the lack of liquidity, falling internal consumption, and general uncertainty could lead to the loss of millions of additional jobs.
The current naval blockade, imposed by President Donald Trump on April 13, may continue to pressure Tehran to negotiate a way out of the war by cutting off critical oil revenues.
Frequently Asked Questions
How many jobs were lost in Iran due to the war?
Viceminister Gholamhosein Mohamadi reported the loss of 1 million direct jobs and 2 million indirect jobs. About 135.000 jobs were lost directly during the war, and nearly 1 million people left the labor market.
What is the current inflation rate in Iran?
General inflation has reached 71%, while some food products have experienced inflation as high as 100%.
What impact did the military offensive have on Iranian industry?
The regime estimates USD 270.000 million in damages to nearly 3.000 industrial infrastructures. This includes the closure of 50 petrochemical plants and significant damage to the Mobarakeh steel plant, which will take at least a year to recover.
How do you think prolonged economic instability affects the likelihood of a negotiated peace in conflict zones?
