Crisis in the Kitchen: Hospitality Loses Over 124,000 Jobs in Just One Year

In a year that was supposed to be about recovery and rebuilding, the hospitality industry is facing a harsh new reality: an exodus of workers that threatens to upend one of the UK’s most essential sectors.

New figures from the Office for National Statistics (ONS) reveal that between May 2024 and May 2025, the accommodation and food services sector saw a staggering drop of 124,376 payrolled employees—the sharpest decline of any sector across the UK. The fall, representing a 5.6% contraction, marks the 12th consecutive month of workforce shrinkage in the industry.

As of May 2025, just over 2.08 million people remain on payroll in the hospitality sector, down from nearly 2.21 million a year ago.

But this isn't just a hospitality problem—it’s a national warning sign. The Labour Market Overview, also published by the ONS, estimated that the overall number of payrolled employees across the UK fell by 109,000 in May alone. That figure not only surpassed expectations but exceeded the worst-case scenarios laid out by both the Office for Budget Responsibility (OBR) and Deutsche Bank.

Originally, the OBR had forecasted that changes to employer National Insurance contributions (NICs)—announced in the 2023 Autumn Budget—would cost the UK around 50,000 jobs. That estimate was later revised upward. Deutsche Bank warned that the number could be as high as 100,000 jobs lost. Both projections have now been eclipsed in a single month.

Frontline sectors are feeling the brunt of the blow—none more so than the hospitality industry.

“Losing more than 100,000 jobs across the economy in a month goes far beyond the worst-case scenario predicted by the Government’s own fiscal watchdog, major banks, and countless business groups,” says Kate Nicholls, CEO of UKHospitality.

Nicholls has been vocal in her criticism of the NICs hike, calling it a “tax on jobs” that undermines economic growth and disproportionately affects sectors built on part-time and entry-level employment.

“Sectors like hospitality are the very ones you need to create jobs in every part of the UK—for people of all ages, backgrounds, and education levels,” she explains. “Instead, those sectors are being choked.”

The consequences are more than statistical. Restaurants, hotels, cafés, and pubs—once vital arteries of local economies—are finding it harder than ever to stay staffed, let alone grow. Many have scaled back their hours or services; some have shut down altogether.

UKHospitality is calling for an urgent review and reversal of the NICs increases, warning that the current policy is stifling the very industries capable of driving inclusive growth.

“These shocking figures should make it abundantly clear to the Government that the changes to employer NICs are inflicting more harm than good,” Nicholls says. “They must be reviewed—and reversed—before more damage is done.”

With summer approaching—a critical season for hospitality businesses—the industry is hoping policymakers will act before the sector’s workforce crisis becomes permanent.