Iran’s Internet Blackout Devastates Online Economy, Millions Face Job Losses

At her studio in Tehran, fashion designer Amen Khademi prepared for a photo shoot featuring a jacket with Persian-inspired motifs. But even as she applied lipstick to her model, anxiety clouded her concentration. After four months without internet access to her customers, she wondered if her business would survive.

Iran’s 90 million citizens have been cut off from the global internet for most of 2026, representing one of the world’s longest and most severe national shutdowns. The blackout has decimated an online economy that had previously thrived despite government restrictions and international sanctions.

“The internet outage in the past four months has completely destroyed not only my business, but many online businesses,” Khademi said. She hasn’t made a single sale in months.

Despite reaching an uneasy truce with the United States and Israel, Iranian authorities have refused to restore internet access, claiming the shutdown remains a wartime necessity. The decision has sparked widespread outcry as it compounds the economic pain from military strikes on key industries and ongoing U.S. sanctions.

Before January, Iranians could access the internet with significant content restrictions. Now, all connections to the global web have been severed. While workarounds exist, they have become prohibitively expensive for most citizens.

The economic toll is staggering. According to Afshin Kolahi, a member of Iran’s Chamber of Commerce, the internet cutoff costs the Iranian economy an estimated $30-40 million daily, with indirect losses potentially doubling that figure. Communications Minister Sattar Hashemi has acknowledged that approximately 10 million jobs depend on internet connectivity.

A Digital Lifeline Severed

Throughout years of economic hardship brought on by sanctions and mismanagement, platforms like Instagram and WhatsApp had become crucial for Iranians. Small businesses found customers online, and individuals earned supplemental income to afford skyrocketing prices for essential goods.

The digital shutdown began in January during mass anti-government protests. As restrictions were starting to ease, authorities implemented a complete blackout on February 28 when conflict with the U.S. and Israel escalated.

“What makes Iran’s shutdown unprecedented is the combination of scale and severity: an entire country of 90 million people with a developed digital economy deliberately reverted to a controlled national intranet,” explained Mahsa Alimardani, an associate director at the rights group Witness who specializes in technology threats and opportunities.

While regional internet restrictions have occurred in places like Kashmir and Myanmar, and countries like China and North Korea maintain permanent controls, Iran’s sudden disconnection of a previously online population stands out for its economic impact.

DigiKala, a flagship of Iran’s e-commerce sector, recently announced it was laying off 200 employees—approximately 3% of its workforce. Reza Olfatnasab, who heads a national association representing digital businesses, told Iranian media that the pain extends beyond online platforms to “production, foreign trade and even traditional business.”

For Khademi, whose Instagram page with over 30,000 followers served as her storefront, the situation is dire. The photo shoot she conducted was merely to preserve content for when—or if—access is restored.

Her model, Farnaz Ojaghloo, faces similar challenges. As a fitness coach, Ojaghloo has lost both modeling opportunities and the ability to conduct online fitness courses for clients within Iran and abroad.

“Psychologically, it really hits hard,” Ojaghloo said. “All the plans you had for six months or a year ahead get pushed aside, and your only concern becomes surviving in the moment.”

Limited Options, Growing Desperation

While the government has created a “national internet” as an alternative, most Iranians find it woefully inadequate. A Tehran-based advertising professional, who requested anonymity for security reasons, reported that sponsors have little interest in content that cannot be posted on major platforms like Instagram. His income has virtually disappeared since the war began.

A gamer from Isfahan, who also spoke on condition of anonymity, described Iran’s domestic network as “terrible”—slow, insecure, and riddled with technical problems. Like many content creators, he has lost nearly all income from sponsors and donations.

Iran has developed domestic social media platforms modeled after services like WhatsApp and YouTube, but these are heavily monitored and censored. “Nobody really wants to use these platforms, but there is no other option,” the gamer said.

Under mounting economic pressure, the government has begun allowing limited internet access to certain professions and businesses. However, an e-commerce trade group in Tehran publicly condemned this tiered system as “an abuse of an obvious need of every citizen” and warned about “the destruction of the country’s infrastructure at the hands of our own decision-makers.”

The effects of the shutdown are increasingly visible on Tehran’s streets. Reza Amiri, a 32-year-old former employee at an internet provider, now sells hats and umbrellas outside a metro station after losing his job when the war started. He hasn’t received his final month’s salary.

Monireh Pishgahi, who sells ornaments and accessories on Tehran’s famous Vali Asr Street, previously ran a tailoring business that supplied three online shops. As orders disappeared, she was forced to shut down and lay off her five employees.

“After the war, you see them all along the sidewalk,” said downtown shopkeeper Mohammad Rihai, referring to the growing number of street vendors. “I cannot fight them anymore.”

The crisis is accelerating brain drain concerns. A software developer, who also requested anonymity, reported that the internet shutdown has eliminated remote work opportunities, prompting more Iranians to consider emigration. His own employer recently laid off nearly all staff members, leaving him jobless in an increasingly desperate economic landscape.