The global pandemic and state closures of dine-in service have cost the restaurant industry 5.9 million jobs, wiping out three decades’ worth of employees in just over six weeks, according to new federal data released Friday.
The industry lost 5.5 million jobs in April, and newly revised numbers from March show restaurants lost 500,000 employees, the vast majority of them during the last two weeks of the month.
The numbers show the first true picture of the devastation that hit the industry. About one in four jobs lost during those two months was at a restaurant.
Overall, the economy lost 20.5 million jobs in April, and the unemployment rate skyrocketed to 14.7%. Restaurants now employ half the number they did two months ago, meaning the pandemic has sent employment levels in the industry to where they were in the late 1980s.
That devastation hit just about every type of restaurant, from small local diners to giant chains. It also includes everybody from high-end operators such as Union Square Hospitality Group, which temporarily closed its doors and furloughed workers in March, to franchisees of fast-food chains such as Burger King that reduced in-store headcount.
Companies such Logan’s Roadhouse owner CraftWorks, operating out of bankruptcy, laid off thousands. Franchisors such as Auntie Anne’s parent company Focus Brands cut employees while The Cheesecake Factory furloughed 41,000 workers.
Many of these furloughs are temporary, and restaurants are starting to bring at least some of them back as business has improved in recent weeks. Shake Shack, which laid off more than 1,000 people last month, said this week it has started bringing some of them back.
Others have started rehiring workers after receiving Paycheck Protection Program loans designed specifically to get them to rehire workers.
At the same time, however, some job losses are turning permanent. At the 97-unit Garden Fresh Restaurants, owner of the salad bar chains Souplantation and Sweet Tomatoes, a temporary closure in March likely became permanent this month.
The company says it will likely file for bankruptcy protection and sees no way to reopen stores under current regulations. It employs 4,400, many of whom count their tenure in decades.
“We have the highest number of highly tenured employees of any place I’ve been,” CEO John Haywood said in an interview. “We have many 15-20-25-year employees.”
Likely thousands of independent and local restaurants will not reopen. Numerous local restaurants have publicly said they are closed for good, seeing no way they can open their doors under restrictions forced by local governments to stop the coronavirus.
At the same time, companies that service the restaurant industry, faced with a sudden, steep decline in demand as establishments close their doors, have also cut workers, likely feeding into the 20.5 million job decline in April.
Distributors such as Sysco and Performance Food Group have furloughed workers, while companies such as Sysco and the point-of-sale provider Toast also laid off employees.
Employees who lost their jobs hold out hope that the industry can emerge from this period and start rehiring again.
“People in this industry work very hard,” said Kevin Armantrout, who lost his job as CEO of the two-unit Lucy’s Retired Surfers Bar & Restaurant, along with all his employees, when the owner shuttered it in March. “It’s a very unique club to work through the trenches. You have to keep telling yourself this is temporary.
“There will be hard times—let’s face it—for a lot of people.”
Source: Thanks https://www.restaurantbusinessonline.com/financing/pandemic-has-cost-restaurants-59-million-jobs