Iran’s private sector is reeling from the impact of the ongoing war with the U.S. and Israel, with businesses across the country resorting to mass layoffs as the conflict and the blockade of the Strait of Hormuz take a heavy toll on the economy, The New York Times reported Sunday.

According to Iranian business sources cited by the Times, dozens of major tech companies have laid off hundreds of employees across all sectors, with one labor leader warning that some 3.5 million workers could be affected by the trend in Iran’s industrial sector alone. The private sector struggles are signs of a “deepening crisis” for the regime, the report said, as mass layoffs and business closures will greatly decrease tax revenue, which the government has increasingly relied on during trade shutdowns caused by the war.

The report comes as President Trump has opted to squeeze Iran’s economy through his blockade of the country’s ports, causing billions of dollars in lost oil revenue. Trump has said he hopes the Iranian economy will collapse under pressure, while other U.S. officials have stated that the aim is to “suffocate the regime.”

Iran’s new supreme leader, Ayatollah Mojtaba Khamenei, has urged companies to avoid layoffs “to the extent possible,” but the regime’s harsh wartime measures, especially its near-complete internet shutdown, have caused some $80 million in daily losses, according to the leader of an Iranian tech lobby.

Major Iranian companies, including digital commerce platform Digikala and e-commerce site Kamva, have been forced to lay off significant portions of their staff or shut down entirely. The Times also cited the semi-official Iranian Labor News Agency, which reported that a major textile factory cut 700 of its 800 workers, while another laid off 500.
The war’s impact on Iran’s industrial sector, including strikes on oil and gas facilities and raw material production, has compounded the economic crisis. Senior government official Gholamhossein Mohammadi estimated that the war has cost one million jobs, “and the direct and indirect unemployment of two million people.”

As the regime struggles to address the crisis, some Iranians have resorted to selling off their cars and jewelry to make ends meet.

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