Bars, Hotels and Restaurants Become the Economy’s Fastest-Growing Employers

Operators of hotels, bars and restaurants—hit hard as the Covid-19 pandemic took hold—are now among the country’s fastest-growing employers, offsetting a slowdown in tech-related hiring.

The leisure-and-hospitality industry is rebuilding its workforce after cutting back during the pandemic’s early days. In contrast, companies focused on providing business and tech-related services have slowed their growth in recent months.

Because the hospitality industry includes a larger number of private-sector jobs than the tech and information sectors, the shift in hiring patterns has helped keep the U.S. unemployment rate at a 53-year low and the overall job market tight.

Here is a look at how hiring patterns have shifted in recent years.

Since November, about half of job-cut announcements among U.S.-based employers have come from tech companies, according to outplacement firm Challenger, Gray & Christmas.

The cuts partially reverse some of the hiring made during the height of the pandemic, when lockdowns led to increased demand for tech products and services.

Payrolls grew faster at most companies in the S&P 500’s technology and consumer-discretionary sectors during the first two years of the pandemic than during the preceding two-year period, according to a Wall Street Journal analysis of FactSet data.

Factors such as a return to prepandemic consumer habits, rising interest rates and fears of an economic downturn have prompted some companies to recalibrate their head counts.

Amazon.com Inc., for example, nearly doubled its workforce amid increased demand for its e-commerce, grocery and cloud-computing businesses. The company grew to more than 1.5 million employees at the end of last year from about 800,000 at the end of 2019, FactSet data show. Amazon recently announced layoffs totalling more than 18,000 staffers.

The tech layoffs might not be affecting the broader employment data for other reasons. Job-cut announcements don’t always shrink company workforces as much as promised. Business can improve, vacant jobs can go unfilled and layoffs can sometimes take months to execute.

Hiring also remains strong among some of the country’s biggest companies. Chipotle Mexican Grill Inc. said in January that the restaurant chain plans to hire 15,000 workers in the U.S. ahead of an expected increase in demand. Some food businesses—such as Kroger Co., the largest U.S. supermarket operator by sales—are recruiting former employees to fill staffing gaps.

The boom in casual footware ushered in by the pandemic has ended, a potential problem for companies such as Adidas that benefited from the shift to less formal clothing, Bank of America says.

The casual footwear business has been on the ropes since mid-2023 as people began returning to office.

Analyst Thierry Cota wrote that while most downcycles have lasted one to two years over the past two decades or so, the current one is different.

It “shows no sign of abating” and there is “no turning point in sight,” he said.

Adidas and Nike alone account for almost 60% of revenue in the casual footwear industry, Cota estimated, so the sector’s slower growth could be especially painful for them as opposed to brands that have a stronger performance-shoe segment. Adidas may just have it worse than Nike.

Cota downgraded Adidas stock to Underperform from Buy on Tuesday and slashed his target for the stock price to €160 (about $187) from €213. He doesn’t have a rating for Nike stock.

Shares of Adidas listed on the German stock exchange fell 4.5% Tuesday to €162.25. Nike stock was down 1.2%.

Adidas didn’t immediately respond to a request for comment.

Cota sees trouble for Adidas both in the short and long term.

Adidas’ lifestyle segment, which includes the Gazelles and Sambas brands, has been one of the company’s fastest-growing business, but there are signs growth is waning.

Lifestyle sales increased at a 10% annual pace in Adidas’ third quarter, down from 13% in the second quarter.

The analyst now predicts Adidas’ organic sales will grow by a 5% annual rate starting in 2027, down from his prior forecast of 7.5%.

The slower revenue growth will likewise weigh on profitability, Cota said, predicting that margins on earnings before interest and taxes will decline back toward the company’s long-term average after several quarters of outperforming. That could result in a cut to earnings per share.

Adidas stock had a rough 2025. Shares shed 33% in the past 12 months, weighed down by investor concerns over how tariffs, slowing demand, and increased competition would affect revenue growth.

Nike stock fell 9% throughout the period, reflecting both the company’s struggles with demand and optimism over a turnaround plan CEO Elliott Hill rolled out in late 2024.

Investors’ confidence has faded following Nike’s December earnings report, which suggested that a sustained recovery is still several quarters away. Just how many remains anyone’s guess.

But if Adidas’ challenges continue, as Cota believes they will, it could open up some space for Nike to claw back any market share it lost to its rival.

Investors should keep in mind, however, that the field has grown increasingly crowded in the past five years. Upstarts such as On Holding and Hoka also present a formidable challenge to the sector’s legacy brands.

Shares of On and Deckers Outdoor , Hoka’s parent company, fell 11% and 48%, respectively, in 2025, but analysts are upbeat about both companies’ fundamentals as the new year begins.

The battle of the sneakers is just getting started.

Bars, Hotels and Restaurants Become the Economy’s Fastest-Growing Employers

Hospitality companies revive their hiring after pandemic cuts, offsetting slower growth in tech jobs

The pandemic-fuelled love affair with casual footwear is fading, with Bank of America warning the downturn shows no sign of easing.