Type to search

Food Service Industry Updates

Restaurant Industry Finished 2020 with 20% Fewer Jobs Because of Virus

Restaurants had to cut 372,000 jobs in December because of plunging sales.

The restaurant/foodservice industry was expected to provide 15.6 million jobs in 2020, with eating and drinking establishments alone projected to account for 12.3 million jobs, according to the National Restaurant Association (NRA). That 15.6 million jobs would have represented 10% of all payroll jobs in the economy and made the industry the second-largest private sector employer in the economy, the association said in a report on its website.

But that was before the coronavirus pandemic hit last March. The eating and drinking place sector finished 2020 nearly 2.5 million jobs (or 20%) below its pre-coronavirus level, NRA stated.

2020 started out well enough. In January and February, NRA said that eating and drinking establishments experienced their 10th consecutive year of employment growth, providing a record 12.3 million jobs in February. But in March and April, when the pandemic led to government-mandated lockdowns, many restaurants and bars were forced to close and millions of employees were laid off or furloughed.

In April 2020, the number of industry jobs plummeted to 6.2 million, according to the Bureau of Labor Statistics.

But when states’ economies began to reopen in May and June, the NRA points out the “unprecedented” hiring surge that occurred, with nearly three million restaurant employees returning to payrolls. But it only marked the beginning of a long road to recovery for the restaurant industry, the association added.

From July through October, eating and drinking places added about one million jobs, according to the Bureau of Labor Statistics, which the NRA stated was “only enough to put a modest dent in the staffing shortfall.”

In November, virtually no new jobs were created because of several factors, NRA said, including the winding down of outdoor dining, rising restrictions on indoor dining and scaled back holiday celebrations.

The NRA said “the bottom fell out in December, as plunging sales forced restaurants to cut 372,000 jobs.” NRA said the employment shortfall of nearly 2.5 million jobs was nearly three times larger than the next closest industry: the professional and business services sector, which was about 858,000 jobs below its pre-coronavirus level in December.