Business conditions in the restaurant industry deteriorated rapidly at the end of 2020, with sales declining in each of the final three months of the year. This led to a corresponding downsizing of restaurant payrolls.

Eating and drinking places* lost a net 19,400 jobs in January on a seasonally-adjusted basis, according to preliminary data from the Bureau of Labor Statistics (BLS). This followed a loss of more than 400,000 jobs in December, and marked the third consecutive monthly decline in restaurant employment.

In total during the last three months, nearly 450,000 restaurant jobs were lost. That represented more than 10% of the jobs that were recovered during the first six months following the spring lockdowns. This increases the likelihood that the restaurant industry’s employment recovery will be measured in years and not months.

[Note: The BLS monthly employment dataset measures jobs during the payroll period that includes the 12th of each month. Changes in restaurant staffing levels – both negative and positive – have occurred rapidly during the coronavirus pandemic, as restaurants quickly adjust their operating status in response to evolving regulatory and economic conditions. As a result, significant changes likely occurred during the weeks between each measurement period, and the monthly data may not fully capture the total job losses experienced during the coronavirus lockdowns. Based on surveys of restaurant operators, the National Restaurant Association estimates that more than 8 million eating and drinking place employees were laid off or furloughed during the peak of the lockdowns.] 

Staffing remains below pre-coronavirus levels in every segment

While all of the major restaurant segments added jobs during the initial rebound from the spring lockdowns, employment remains well below pre-coronavirus levels across the board. [Note that the segment-level employment figures are lagged by one month, so December is the most current data available.]

The fullservice segment expanded payrolls by nearly 2.3 million since the April trough, which is nearly 1 million more jobs than the other major restaurant segments combined. However, the fullservice segment still finished 2020 nearly 1.3 million jobs below its pre-coronavirus staffing levels. 

Limited-service job losses were somewhat less severe during the initial months of the pandemic, as these operations were more likely to retain staff to support their existing off-premises business. The quickservice and fast casual segments added nearly 750,000 jobs between April and December, after losing nearly 1 million jobs during the lockdowns. 

Snack and nonalcoholic beverage bars – including coffee, donut and ice cream shops – added nearly 300,000 jobs between April and December. This leaves the segment roughly 95,000 jobs below its February level.

Employment in the food service contracting, catering and mobile food service, and bars and taverns segments also remained well below pre-coronavirus levels in December.

*Eating and drinking places are the primary component of the total restaurant and foodservice industry, which prior to the coronavirus outbreak employed 12 million out of the total restaurant and foodservice workforce of 15.6 million.

Read more analysis and commentary from the Association's chief economist Bruce Grindy.