Dive Brief:

• Bar and restaurant shutdowns in 12 states and the District of Columbia could impact roughly 7.4 million leisure and hospitality jobs, according to a report from global outplacement and executive and business coaching firm Challenger, Gray & Christmas, Inc. emailed to Restaurant Dive.
• Based on this data, California, New York and Illinois will be among the states impacted the most, with over 3.6 million people employed in leisure and hospitality. 
• But they won't be alone. Over 1 million restaurant jobs in Texas could also be impacted, with the Texas Restaurant Association projecting losses of 500,000 jobs following Dallas and Harris counties’ decision to close restaurant dining rooms. 

Dive Insight:

Given the ongoing mandated closures of bars and restaurants following the rapid spread of the novel coronavirus, the impact on restaurants will be significant. Year-over-year bookings on OpenTable were down 56% on Monday. Traffic was down 3.7% for full-service restaurants and 3.1% for limited-service restaurant during the week ending March 8, according to Black Box Intelligence. 

While the industry is having to switch to off-premise only, many restaurants that don't have takeout and delivery capabilities have been forced to close entirely and many others have laid off their staff.

Punch Bowl Social let go of 91 employees in a Denver location following an eight-week shutdown put in place by the city's mayor on Monday. Other Denver restaurants have laid off upwards of 200 people each. Restaurants in New York City are laying off staff so they can apply for unemployment insurance until the restaurants reopen.

This is an incredibly stark contrast to the beginning of the year when restaurants said finding labor was among their top concerns for 2020. After things return to normal, getting these employees back could only compound the problem as many shift to other jobs like in grocery stores where demand for help is skyrocketing.

"With no income, many of these workers will likely seek, and hopefully, find other employment in the interim, which could make them unavailable to come back," Challenger said. "If the shutdowns continue even longer, many of these jobs may not exist immediately when the crisis ends."

Without intervention from a proposed $1 trillion rescue package, U.S. Treasury Secretary Steven Mnuchin warned senators this week that unemployment could rise to 20%, according to CNBC. This level would be twice as high as the unemployment peak of 10.2% in October 2009. 

While this is only a projection, without intervention, unemployment will only go up from here. The numbers from Challenger, Gray & Christmas are only for 12 states and nearly half of U.S. states have banned dine-in operations, while a handful of others have limited capacity. In a market that many have previously said was oversaturated with restaurants, it is very likely that many establishments, especially independently owned operations, just won't be able to reopen after this crisis is over.