Economy

Hardest-hit industries: Nearly half the leisure and hospitality jobs were lost in April

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Key Points
  • A torrent of layoffs in the leisure and hospitality industry led the U.S. economy to its worst month of job losses in modern history.
  • The leisure and hospitality industry lost 7.7 million jobs, or 47% of total positions.
  • The vast majority of the industry's layoffs were in food service, where the government said 5.5 million chefs, waiters and cashiers lost jobs.
  • Health care also saw steep job losses (1.4 million) thanks to a contraction in revenue at hospitals and clinics, the result of fewer elective and routine procedures.

A torrent of layoffs in the leisure and hospitality industry led the U.S. economy to its worst month of job losses in modern history.

The industry, which includes waiters, bellhops, bartenders and casino employees, suffered by far the largest losses in April as the coronavirus and efforts to contain its spread kept Americans homebound.

The leisure and hospitality industry lost 7.7 million jobs, or 47% of total positions.

The vast majority of the industry's layoffs were in food service, where the government said nearly 5.5 million chefs, waiters, cashiers and other restaurant staff lost employment. Casinos and amusement parks also cut more than 1 million workers last month as Americans refrained from travel and shored up finances amid the ongoing U.S. pullback.

The Cheesecake Factory, for example, furloughed 41,000 hourly workers at the end of March. The struggling restaurant chain saw its March same-store sales decline 46% as dining room closures tanked its business. The company is forecasting that 15% of its dining rooms will reopen by the end of May.

The job losses at The Cheesecake Factory would be reflected in the April jobs report instead of the March print because of the way the government surveys businesses and households.

The health-care and education sector also saw some of April's steepest job cuts with a loss of 2.5 million. Health care comprised the majority of that decline as a contraction in revenue, the result of fewer elective and routine procedures forced hospitals and clinics to cut 1.4 million employees. 

Dental offices, which are categorized under the broader health-care subsector, cut more than 500,000 payrolls.

"The changes in these measures reflect the effects of the coronavirus (COVID-19) pandemic and efforts to contain it. Employment fell sharply in all major industry sectors, with particularly heavy job losses in leisure and hospitality," the Labor Department said in a release.

"In health care, employment declined by 1.4 million, led by losses in offices of dentists (-503,000), offices of physicians (-243,000), and offices of other health care practitioners (-205,000). Employment also declined in social assistance (-651,000), reflecting job losses in child day care services (-336,000) and individual and family services (-241,000)," the government said.

The professional and business services sector, which includes lawyers, accountants, engineers and temporary workers (such as laborers, office clerks and packagers) lost 2.1 million jobs. Temporary help workers, typically contracted on a per diem or per-project basis, comprised nearly 1 million of that industry's losses.

The industry figures came as part of the Labor Department's April 2020 jobs report, which showed that payrolls plunged by 20.5 million last month while the unemployment rate rocketed to 14.7%, record levels in the post-World War II era.

Those numbers are dire reminders of the millions of Americans who've lost their jobs in recent weeks thanks to the coronavirus and government strategies to stop Covid-19.

State governments across the country ordered the majority of businesses closed to slow the spread of Covid-19. State governors in New York, California and New Jersey all ordered a wide swath of their commerce closed, shuttering firms including bookstores, dine-in restaurants and florists.

But such efforts to stanch the spread of the disease, which has killed more than 75,000 Americans and infected more than 1.2 million in the U.S., has forced thousands of managers to lay off employees to offset the abrupt halt to sales. 

CNBC's Amelia Lucas contributed to this report.

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