Iran Faces Loss of Up to 1.4 Million Jobs This Year, Official Warns

Iran could lose up to 1.4 million jobs this year if its economy contracts by seven to eight percent, a senior Labor Ministry official said on Tuesday. Malek Hosseini, deputy minister for entrepreneurship and employment development, estimated that around 2.5 million people in the country are already unemployed.

Hosseini based the projection on official figures he cited in an interview with the labor-focused ILNA news agency. Iran's economy, he said, contracted by 10 percent excluding oil and 4.6 percent including oil in the spring. Two decades of Labor Ministry research show that every one-percentage-point decline in economic growth corresponds to an average loss of 170,000 jobs.

"If negative growth of seven to eight percent is recorded by the end of the year, around 1.2 million to 1.4 million people will have completely left the labor market," Hosseini said. That means each point of lost GDP translates into roughly 170,000 fewer paychecks nationwide.

What do the insurance numbers show?

Around 1.15 million people were removed from Iran's compulsory social insurance rolls between March and August. Hosseini cautioned that further analysis is needed to distinguish retirements, disabilities and new registrations within that figure. Another 300,000 people joined the unemployment benefits system by the end of August.

The formal labor market recorded a net loss of approximately 500,000 workers during the Iranian year ending March 2026, according to the deputy minister. Informal employment (work without registered contracts or coverage) now accounts for 54 percent of Iran's workforce, against 46 percent in formal employment.

"Our labor market suffers from chronic and structural problems," Hosseini said. He added that the balance has shifted further toward informal and underemployed work since the war.

Who else has sounded the alarm?

Ali Babaei Karnami, head of parliament's Social Affairs Committee, said on October 23 that more than 1.7 million Iranian workers had lost their jobs since the start of the 12-day war. Economist Ahmad Alavi told Iran International on October 18 that poverty, unemployment and declining purchasing power had existed before the war but had since worsened, attributing the country's economic difficulties to the Islamic Republic's policies.

What is the government proposing?

The Labor Ministry is developing a public employment program for unemployed people and informal workers affected by the crisis. It offers short-term construction and service-sector work — with a significant catch.

"There is absolutely no social security insurance under the public employment program," Hosseini said. Participants will also fall outside the protections of Iran's labor law, although existing employers and workers in registered businesses will remain subject to those regulations.

The ministry is working with the Central Bank to identify informal workers through banking transactions, distinguishing wage income from investment returns. Hosseini also warned that if raw materials are not adequately supplied, Iran's garment production and distribution chain could suffer losses equivalent to about 60 percent of its pre-war workforce — potentially affecting up to 750,000 jobs.

Workers, retirees and employees across Iran have repeatedly staged protests in recent months over low wages, unpaid salaries, rising living costs, dismissals and job insecurity, and Hosseini's projections suggest that pressure will intensify if the contraction scenario holds through year-end.