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With coronavirus, restaurants have been in financial limbo. Now the bottom will fall out

At the Deluxe Town Diner, waitress Emilia Coelho, who has worked in the Watertown spot for 15 years, says goodbye to her regular customers for a period of time.
At the Deluxe Town Diner, waitress Emilia Coelho, who has worked in the Watertown spot for 15 years, says goodbye to her regular customers for a period of time.Suzanne Kreiter/Globe staff

Starting Tuesday, the bottom will really fall out for the restaurant industry.

After days and weeks of mounting fear about coronavirus keeping people home, all restaurants and bars must stop dine-in operations, by order of Governor Charlie Baker, until April 6.

The only food they can serve has to be through takeout or delivery services. And liquor sales — a major part of their revenue ― is out altogether.

Restaurateurs I talked to fully back Baker’s decision, but it’s a financially devastating decision that overnight means many of the 300,000 people working in the Massachusetts restaurant industry could be temporarily out of jobs. Many establishments are expected to close their doors for the next three weeks, unless they already had a robust takeout and delivery operation.

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Chris Jamison, who runs a restaurant group that includes Yvonne’s and Lolita, shut down all six Boston locations on Monday and began the process of letting go about 500 employees.

“It’s a hard pill to swallow. We spent 10 years building a company that has gotten this big and in one day you’re laying everybody off,” said Jamison. “It’s the only way we can survive this.”

John Pepper, co-founder and owner of Boloco, said he’s doing triage as he anticipates what it will take to keep his chain of eight burrito restaurants open.

“We could lose our business in a matter of weeks,” he said matter-of-factly.

The sweeping order will devastate the bottom line of restaurants ranging from fine dining to fast food. Among the long list of temporary closures include Puritan & Co., Island Creek Oyster Bar, Empire, Toro, Davio’s, and Legal Sea Foods.

Not that long ago, Legal Sea Foods’s CEO Roger Berkowitz confronted a labor shortage. Now he must furlough the majority of his 2,500-employee workforce in Massachusetts.

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Across the restaurant industry, the brunt of the pain will be felt by the line cooks and dishwashers, and waiters, hosts, and hostesses, who face sharply reduced hours or must seek unemployment benefits, which cover only about half a weekly paycheck, with a maximum of $823 a week.

On Monday, Emilia Coelho, a waitress at Deluxe Town Diner in Watertown for 15 years, was working her usual 6 a.m. to 3 p.m. shift, saying goodbye to regular customers and telling them, “See you in three weeks.”

In between customers, Coelho, 51, was trying to log onto the state unemployment benefits site. Coelho said she was surprised by the governor’s severe restrictions on restaurants, even though other states and entire countries have enacted similar measures to slow down the spread of Covid-19.

“When things happen somewhere else, you never think it’s going to hit home,” she said.

Calling the situation “scary,” Coelho said she’s not sure what the future holds. “You don’t know if it will be busy afterward and how people will feel coming back,” she said.

Deluxe Town Diner owner Don Levy employs about 35 people but will only keep a skeletal crew of four to handle takeout and delivery. His business dropped off 75 percent in recent days, and he estimates he lost about $25,000 in sales just over the weekend.

Like many others in the business, he has loans, vendors to pay, and other bills.

“We’re not going to be able to pay them going forward,” said Levy. “I’ve burned through working capital … This happened with no notice.”

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For most restaurants, the loss of alcohol sales and walk-in customers will be impossible to make up through takeout and delivery.

“Our revenue is definitely going to be cut in half for the month,” said Sam Sokol, owner of Dirty Water Dough Co., a pizzeria with two locations in the Back Bay and East Boston. Half his sales typically come from dine-in only.

Still, Sokol wants to make a go of it. Other than stopping selling pizza by the slice, he’s keeping his regular menu. The dining area has been blocked off, and customers are encouraged to order online or by phone to reduce social interactions.

“A lot of clients come in every other day because they don’t even cook,” he said. “We want to keep the community safe, but we also want to keep the community fed.”

The restaurant business is a notoriously tough one — highly competitive with low margins. There were already concerns about whether Greater Boston had reached a saturation point, with a string of high profile restaurant closings over the last couple of years, including Les Sablons, Durgin Park, and Top of the Hub.

“Not everyone, from business owners to employees, will survive when we get past this,'' said Bob Luz, president of the Massachusetts Restaurant Association. "There will be significant casualties along the way.”

Luz and Jamison have been pushing Beacon Hill for more generous unemployment benefits to restaurant workers hurt by a Covid-19-related economic slowdown. They also want to defer monthly meals tax payments to the state, which are due Friday.

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Jamison, the CEO of a collection of restaurants that includes Yvonne’s, estimates his restaurant group’s tax bill to the state is about $200,000. With that money, he could make payroll for another week.

If the Commonwealth wants to throw a financial lifeline to struggling restaurateurs, Jamison said, it can start by saying: “Don’t write us that check on Friday.”

A Baker administration spokesman said the state is reviewing the industry’s request.

Our public health crisis is quickly evolving into an economic earthquake that will shake us to our core. We’ve all stocked up on groceries, but many people are going to get tired of cooking and eating at home every night, especially after spending most of their day housebound.

UberEats is waiving delivery fees to encourage us to order more takeout. The Newton-Needham Regional Chamber launched a #dinelocal Takeout Challenge. Among those restaurants participating: Blue Ribbon BBQ, Sweet Tomatoes, and JP Licks. Couldn’t we all use some ice cream right about now?

Or participate in #buyagiftcard campaign to support restaurants and shops you love and want to enjoy in the future.

Americans may be stuck at home, but we still gotta eat. Let’s at least eat well and save a small business along the way.

Janelle Nanos of the Globe staff contributed to this story.

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Shirley Leung is a Business columnist. She can be reached at shirley.leung@globe.com.