Repeated internet shutdowns are breaking the digital economy millions depend on.
Spanning mass protests and multiple armed conflicts, three waves of internet blackouts mandated by the Islamic Republic since June 2025 have likely caused deeper, more sustained damage to ordinary Iranians’ livelihoods than the wars themselves.
A large number of Iranians—up to 20 million according to expert estimates, over a fifth of the population—rely directly or indirectly on online platforms for income. Despite accounting for a relatively small share of GDP, Iran’s digital economy is thus a vital source of jobs and an often essential means to address the daily effects of sanctions and surging inflation. The series of government-ordered internet shutdowns are now pushing that digital economy toward systemic failure.
“The internet was the only space left for ordinary Iranians to make money, to run small businesses. It’s really the only part of the economy where you can find a meaningful private sector. And they’ve completely shut that down,” said Miad Maleki, a former Treasury sanctions official and now a senior fellow at the Foundation for Defense of Democracies, speaking on the group’s podcast.
In the 101 days from the start of 2026 through April 12, Iranians have only had 38 days of access to the internet while enduring 63 days of blackout, according to state-affiliated news sources. The first of the recent series of shutdowns came during last year’s 12-day war with Israel (and, ultimately, the US) when connectivity was initially throttled before a full blackout began on the conflict’s fifth day, June 17, and lasted until June 25. A second disruption followed early this year during the mass protests against the regime (January 9–28). The third, and longest, has accompanied the current war with the US and Israel, stretching to roughly 44 days. Across each of these periods, entire sectors—from Instagram-based microbusinesses to logistics, tourism, and ride-hailing—have been intermittently switched off.
Crucial workarounds disappearing
“A lot of people have already lost their jobs,” Ramin, an IT specialist in Tehran, told Resanegar, Tehran Bureau’s economic unit.
SEO specialists, digital marketers, IT professionals, essentially anyone working in Instagram-based roles. Even large companies like Snapp are planning major layoffs in May if this continues. We’re on a knife’s edge right now, and I doubt the shutdown will end anytime soon.
The government has estimated that each day of internet blackout directly costs the economy about 5 billion tomans (approximately $31.5 million USD, at the current exchange rate), prompting layoffs that cascade into the offline economy. Iranian e-commerce associations warn that more than 95 percent of online businesses have been affected by recent disruptions, with many reporting revenue losses exceeding 80 percent. Meanwhile, sector representatives caution that prolonged outages—now compounded by disruptions to SMS services—risk triggering mass layoffs and broader labor market instability.
Nilofar, a content creation specialist, told Shargh daily that she works on a contract basis and is not entitled to a year-end bonus. “They gave me one last year, but now the business is completely shut down,” she said. “We’ve also lost access to social media—advertising and content creation are essentially pointless under these circumstances. The content writers, video creators, and even the bloggers who worked with our company are now all unemployed.”
E-commerce transactions reached roughly 5,500 billion tomans (approximately $55 million) in 2025. Social media has been central to this ecosystem, with international platforms historically outperforming local alternatives. Instagram and WhatsApp are far more popular than the domestically controlled options such as Bale, Eitaa, and Rubika, according to the technology news site Zommit. The two California-based platforms, both owned by Meta (Facebook), help power a broad range of micro-retail and service businesses, often with low startup costs and high participation from women and informal workers. However, e-commerce still accounts for barely 7 percent of the country’s official GDP.
Over the past decade, Iranians have developed a range of workarounds to participate in e-commerce despite sanctions, relying on VPNs, cryptocurrency wallets, and foreign-based digital bank accounts to access global platforms and move money across borders.
Alongside this informal ecosystem, around 200,000 of the country’s e-commerce providers depend on e-Namad, a government-approved certification required for domestic transactions, Majid Khakpour, head of the Tehran Province E-Commerce Trade Association, told Iranian media In January. These authorized e-commerce businesses “have certainly created jobs for millions of people, and it is estimated that around ten million people are directly or indirectly employed or have the possibility of employment through them,” Khakpour stated. “Over 95 percent of these online businesses have been affected due to internet conditions.”
From YouTubers to small brick-and-mortars, major losses
The fallout from repeated shutdowns has extended well beyond formal e-commerce providers, degrading the broader digital infrastructure that businesses and workers in many sectors rely on. Even basic communication tools have proven fragile. The SMS network, often a last-resort channel for small businesses to reach customers, has also faced disruptions, which industry representatives warned would be “detrimental to the economy and lead to massive layoffs and recession,” according to an April 4 letter from the Tehran E-Commerce Association published by Eqtesad Online.
At the same time, income streams tied to global platforms have steadily eroded. Since December, Iranian YouTubers who had long relied on VPNs to mask their IP addresses and monetize their channels as if their audiences were abroad have reported a collapse in ad revenue. The sharp decline appears to stem from YouTube’s increasing use of network behavior signals, device fingerprinting, and traffic pattern analysis to identify users as being in Iran regardless of VPN usage. Because of US sanctions and Google’s compliance policies, ads are not effectively served to Iranian audiences; traffic from inside Iran either receives no ads or only very low-value placements. The result has been widespread de facto demonetization: videos that once generated several thousand dollars per million views now earn little to nothing.
While limited access to Iran’s domestic intranet remains, businesses say it is largely ineffective as a substitute for the global internet. “Even though people can still use domestic websites and apps, we’re only able to carry out about 5 percent of our operations on the national intranet,” an HR representative at a ride-hailing company told Shargh. “This not only leads to financial losses but also results in layoffs. Support services and many technical functions become impossible…. Many of the content creation and tourism companies we worked with have already been forced to shut down, which will inevitably lead to serious layoffs—and will affect our operations as well.”
These disruptions are also spilling into the offline economy. Traditional businesses such as bookstores, many of which had come to depend on digital tools, are no longer able to contact clients, place orders, manage workflows on platforms like Slack or Teams, or access data stored in the cloud.
Mehdi, a bookseller in Tehran whose workplace was severely damaged by a nearby missile blast, told Shargh News that he lost his job in the first days of the war.
Even the store’s online sales, which I managed with a colleague, shut down immediately because of the internet outage. My income is completely gone. My contract was supposed to run until the end of Esfand [March 20], and we expected to renew it, but when I asked about my holiday bonus, the manager said there was no money. I lost that too. I’ve applied for jobs since then, but everyone is laying off—no one is hiring.
The government’s response to this crisis of its own making has been meager and opaque, signaling little intention to reverse course. In a meeting with e-commerce representatives on April 6, Information Minister Sattar Hashemi promised “targeted and coordinated support” for online businesses, but offered no timeline or concrete measures to mitigate the effects of the shutdown. Decisions about such steps probably lie outside official government channels. Principlist journalist Mohammad Mohajeri told state-affiliated media on April 8 that, while not privy to the details of intelligence community exchanges, he had heard that “high-level” discussions about reconnecting the internet were taking place.
As of press time, internet services remained inaccessible to roughly 99 percent of the Iranian population, with national connectivity measured at around 1 percent of normal levels, according to NetBlocks, the global internet monitoring group.