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Amir Masoud, a 34-year-old website content writer in the Iranian capital, Tehran, knew layoffs were coming but was in denial about the fact they would affect him personally.
In the wake of Israel’s 12-day offensive in June, many Iranians were expecting harsh economic repercussions. Those fears deepened after the reimposition of UN sanctions on 28 September drove companies in the nation of 86.5 million closer to the edge.
As Masoud logged into his computer for another day’s work, an email from HR landed in his inbox. The company was downsizing due to financial pressures and economic uncertainty. His contract would not be renewed in the autumn.
“I never thought it would happen to me,” he said. “I don’t know how I’ll cover my living expenses. I’ve reached out to friends, I’ve sent my resume to a few places through job sites, but the reality is there are no good positions open. The big, reputable companies just aren’t hiring.”
By October, at least 25% of Masoud’s company’s workforce had been laid off. His story is becoming more and more common across Iran as businesses struggle with 40% inflation rates and a depreciating rial.
The current pressures inside Iran are mirrored in many countries around the globe: Rising living costs and job scarcity affecting young people have been fuelling unrest and political change across the Asian continent from Nepal to Pakistan to Bangladesh.
Economic hardship and youth unemployment have long been persistent challenges in Iran, and have sometimes become drivers of major protests – such as “the Bloody Aban” demonstrations in 2019.
But the current downturn has been unusually sudden and deep.
After the Israel-Iran war, companies shed jobs at an alarming rate. The unemployment rate rose to 9.5%, up from 8% last year, according to the International Monetary Fund.
An August survey from the Tehran Chamber of Commerce, the country’s leading private-sector body, reveals the scale of Iran’s current economic crisis. Approximately 33% of companies surveyed said they planned to lay off staff to cope with post-war conditions, while 36% are considering shutting down part or all of their operations. The report found that the manufacturing and IT sectors were hit hardest, with 69% and 63% of those companies, respectively, experiencing a liquidity drop of over 50%.
The recent economic shocks are layered on top of a multi-faceted humanitarian crisis. Iran faces a severe energy imbalance, where water shortages in the summer and insufficient gas supplies in the winter both lead to widespread power outages.
Years of high inflation, largely driven by sanctions, have pushed the cost of a basic household food basket beyond the minimum wage, forcing many families to scale back on nutrition to cover other essential costs.
Access to healthcare is also under strain. Although medicine is exempt from sanctions, many pharmaceutical companies don’t sell to Iran due to difficulties with financial transactions, insurance, and general risk. This has led to drug shortages and fostered a burgeoning black market.
Ultimately, while international sanctions claim to be designed to achieve political aims, their most immediate and tangible impact is most often felt by the general public.
Immediate fallout
The trigger for the UN sanctions was a late August declaration by France, Germany, and the UK, which claimed Iran was in breach of its commitments under the Joint Comprehensive Plan of Action, known as the “Iran nuclear deal”.
This assertion was strongly contested by Iran, Russia, and China, who argued that it was the Western signatories who had failed to fulfill their obligations. After the European powers gave the Islamic Republic a 30-day deadline that passed with no resolution, six punishing Security Council resolutions were reimposed on Tehran.
Iranian officials projected an image of preparedness, insisting they had plans to mitigate the economic fallout.
“All scenarios and possibilities were foreseen,” said Seyed Ali Madanizadeh, Iran’s minister of economic affairs. “We are fully equipped and ready... we will protect all markets.” He also revealed a government plan to introduce an electronic coupon – a type of financial credit for use at specific stores – to support the livelihoods of those affected by the shock.
Additionally, Mohammadreza Farzin, the head of the Central Bank of Iran, met with business leaders and pledged to keep providing the foreign currency required by merchants and producers.
Whatever the state of sanctions preparations, the fallout was immediate. Reports of mass layoffs have surged, particularly among private companies and media outlets. Iran’s vulnerable startup ecosystem, long isolated from the global economy, has been hit by a “tsunami of downsizing”, as one observer put it.
For instance, during the 12-day war with Israel, sales at one e-commerce startup had already dropped by 90%. Its chief marketing officer, Mohammadreza, who asked to be identified only with his first name out of fear of repercussions, said all hope for recovery has now vanished: "The board of directors hoped sales might recover, but they agreed that the prospect of sanctions relief was gone. Now we face even harsher sanctions than before."
The 45-year-old executive said his company’s pre-war plans for expansion, hiring, and even salary increases have all now been scrapped. “They were all replaced by a plan to lay off 10% of our staff,” he said.
The numbers paint a grim picture. According to the Parliament Research Centre, which is the research arm of the Iranian parliament, in the two months since the war ended, Iran’s monthly GDP has been negative compared to the same period last year, with the “war and power outages” cited as primary causes.
Put simply, the reimposition of international sanctions exacerbated an economic situation that was already battered by the war: The value of Iran’s national currency has plummeted to an all-time low, causing the dollar-equivalent of the monthly minimum wage to fall from $180 in March 2025 to under $130 by September.
Amid the turmoil, labour activists are demanding wage increases to offset the crushing cost of living. “Given the rise in living expenses, price changes, and currency fluctuations throughout the year, wages must be increased again,” Fathollah Bayat, head of a contract workers’ union, told an Iranian news agency recently. The minimum wage in Iran is adjusted only once a year, in February.
“They don’t pay our full salaries”
For many who have kept their jobs, their income is no longer guaranteed. Zahra, a 29-year-old journalist who shares the rent for an apartment in central Tehran with her partner, was dealt a severe blow.
“One week after the war started, payday came,” she said. “But the newspaper’s office informed us they could only pay 60% of our salaries. It was a huge shock. I couldn’t pay my share of the rent.”
Zahra had to ask her retired parents for help, a situation she described as emotionally devastating: “My parents are both pensioners and don’t have much income. Having to ask them for money was incredibly difficult for my morale. I feel so guilty, but I have no other choice.”
Even before the war, Zahra relied on bank loans and “Buy Now, Pay Later” services to make ends meet. While the government said it would forgive late fees on small personal loans under 700 million tomans (approximately $7,000) and some private lenders have offered extensions, she said it was not enough. “The economy isn’t improving; it’s getting worse every day. Paying back loans is not easy when you aren’t even receiving your full salary.”
For many Iranians, the fear runs deeper than the immediate economic pain. The possibility of renewed war with Israel looms large and the reimposition of UN sanctions has cast a dark shadow over people’s economic future.
This uncertainty has frozen the job market. Atieh, 27, was laid off from a trading company two weeks after the war and has been unable to find work since.
“I’ve tried so hard, but it’s as if no one is hiring,” said the woman. “Everyone is waiting to see if there will be another war. Every employed friend I talk to says their company is on hold, waiting to see what happens.”
As the mother of a four-year-old, Atieh said her main concern was for her child. “I can buy fewer clothes for myself, or eat cheaper food. But the thought of not being able to provide for my child’s welfare – that is like a nightmare.”
This piece was published in collaboration with Egab. Edited by Ali M. Latifi.
