SAN JOSE (KPIX) – Labor analysts warn that California may be faced with a looming labor shortage as the state races to reopen more and more of its economy that was shut down over the past year.

“A good number of people, by necessity, have gone on to other jobs or moved to other areas of the state or other states,” says Michael Bernick, former Director of California’s Economic Development Department.

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That is the grim reality many employers have discovered as they sought to re-hire employees laid off during the pandemic.

“We went from 64 employees down to 17 or 18 in three days,” says Dan Holder, owner of Jack Holder’s Restaurant in San Jose.

Holder says it pained him to let so many valued employees go at the start of the lockdown last March. And as the county has slowly reopened and his restaurant has rebounded, he says he’s trying to lure as many back as possible.

“To see those numbers deteriorate so quickly from 64 down to 18, that’s something that the owners go to bed thinking about,” Holder said.

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Santa Clara County re-entered the state’s Orange Tier Tuesday, allowing for indoor dining at 50 percent capacity. Holder says limited indoor dining combined with a large outdoor dining setup has enabled him to bring most of his employees back.

Across the county in Morgan Hill, it’s a similar story for the owners of Yolked Restaurant. During the worst of the pandemic, Jim Angelopoulos was operating on a skeleton crew consisting of family and a few trusted employees.

In the months since, he’s slowly been able to rehire a number of former employees.

“In this type of business, people come and go. But I’m lucky, I was able to retain about 70% of my staff,” he said.

At Jack Holder’s, employees said they were eager to return after an unexpectedly long layoff.

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“I’ve been working with the Holder family for many years. I don’t think of this as a corporation; this is a family restaurant. We’re family,” said employee Jorge Tarinda.