No internet for 73 days: Digital siege triggers layoffs, economic collapse in Iran

Dubai: Iran’s wartime internet blackout, now in its 73rd day, is spiralling into a full-blown economic crisis, with layoffs mounting, businesses shutting down and millions facing growing hardship under war, sanctions and digital isolation.

Internet watchdog NetBlocks describes the backout as the longest recorded national internet shutdown in a connected society, the restrictions are crippling Iran’s private sector and deepening pressure on an economy already battered by years of sanctions and inflation.

The blackout, imposed after the US-Israeli war began in late February, has severely disrupted online commerce, financial transactions, communications and industrial operations across the country.

According to Bloomberg, NetBlocks estimates the restrictions have already cost Iran’s economy more than $2.6 billion. The New York Times separately reported that Iranian officials estimate the conflict has directly and indirectly affected up to three million jobs.

For many Iranians, the impact is immediate and personal.

Babak, a 49-year-old product designer at a Tehran tech company, told the NYT he lost his job after the shutdown made digital operations nearly impossible.

“Throughout my career, I have worked hard, continuously learned, and tried to grow,” he told the newspaper. “Yet at this stage of my life, I find myself in an uncertain and ambiguous position.”

He is among a growing wave of workers caught between war disruption, sanctions and the government’s own internet restrictions.

Business owners and analysts say the internet shutdown itself — rather than the bombing campaign alone — is becoming one of the biggest drivers of economic collapse.

“The wave of job cuts, the economic shock and the recession that we’re now seeing is mainly because of the digital siege, not the bombs,” a Tehran-based clothing business owner told Bloomberg.

Iran’s leading financial newspaper, Donya-e Eqtesad, reportedly described the damage as a “silent earthquake” hitting the economy as hard as US and Israeli strikes.

The impact has been especially severe for Iran’s once-growing digital economy.

Digikala, often called the “Amazon of Iran”, has reportedly cut around 200 employees, while Kamva, an Iranian e-commerce platform, announced it was shutting down entirely after months of disruptions and internet restrictions.

“After two wars and months of internet shutdown, we could no longer bypass the crisis,” Kamva founder Hadi Farnoud wrote on X.

Industry officials say online businesses that depended on Instagram, WhatsApp and digital advertising have seen traffic collapse almost overnight.

“Almost 80-90% of our marketing channels have been closed,” one business owner told Bloomberg.

Even companies still operating are struggling with payment systems, supply chains and customer communication.

The crisis extends far beyond the tech sector.

According to the NYT, major industrial facilities, petrochemical plants and steel operations were damaged during US-Israeli strikes, disrupting supplies of key raw materials for factories across the country.

At the same time, restrictions on Iranian ports and maritime trade have complicated imports of industrial goods and essential supplies.

Iranian labour agencies have reported mass layoffs at textile and manufacturing plants, including one western Iranian factory that reportedly dismissed 700 workers and another northern facility that shed 500 jobs.

Other companies remain open only nominally, operating intermittently to avoid complete closure.

“In practice, some of these units do not have real production,” Bahram Zonoubi Tabar, a local labor council official in Iran’s Fars province, told Iranian media, according to the NYT.

Iranian officials say the employment crisis may worsen significantly in the coming months.

Mehdi Bostanchi, head of Iran’s Coordination Council of Industries, warned that the industrial downturn could affect as many as 3.5 million workers.

The growing economic pain comes as the Trump administration openly signals it wants economic pressure to weaken Tehran.

“I hope it fails,” President Donald Trump said this month of Iran’s economy. “Because I want to win.”

Iranian officials insist the country will not surrender under pressure, but economists warn the combination of war damage, sanctions, inflation and digital isolation is creating a dangerous mix.

Iran’s currency had already suffered repeated collapses before the war, fueling nationwide protests and worsening public anger over living costs.

“A strange and overwhelming vortex of economic problems has emerged,” economist Amir Hossein Khaleghi told the NYT.

The internet restrictions are also increasingly pushing Iranians toward state-controlled domestic platforms that critics say lack privacy protections and government oversight safeguards.

According to Bloomberg, messaging platforms linked to Iranian state institutions have seen a surge in users during the blackout as alternatives remain inaccessible.

Analysts warn the longer the restrictions continue, the deeper the damage to Iran’s private sector and long-term economic prospects could become.

For workers like Babak, the crisis is already reshaping daily life.

He told the NYT that he and his wife have sold their cars and jewellery to survive after his second layoff in less than a year.

With little left to sell and no new job in sight, the couple are now relying on family support.

“It pains me to see how this situation has affected my wife’s spirit,” he said. “But we are doing our best to hold on to hope.”