whatson - 2:35 am on Jun 11, 2012 (gmt 0)

I have a developer (who I am about to fire) who put up a robots.txt file containing:

User-agent: *
Disallow: /

Am I right to assume this will be the cause of my substantial traffic drop and no longer being able to see my rankings in Google?
I have since removed the file, but still no recovery. Should my rankings return? If so how long should it take?