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California Pizza Hut Franchises Plan Layoffs Ahead of Minimum Wage Increase
December 26, 2023
California will soon see a drastic shift in its pizza delivery landscape. Multiple Pizza Hut franchises in the state are preparing to eliminate their own delivery driver roles, in what appears to be a response to an upcoming increase to the minimum wage for fast-food workers.
Notices have been filed by several Pizza Hut operators in accordance with the Worker Adjustment and Retraining Notification Act. These notices indicate that these franchises will be discontinuing their delivery services, impacting their entire fleet of delivery drivers. One of the operators, PacPizza, LLC, which runs numerous Pizza Hut outlets, is among these businesses.
Another noteworthy entity making a similar move is Southern California Pizza Co., which predicts that around 841 drivers will lose their jobs. This decision will impact Pizza Hut franchises across several counties, including Los Angeles, Orange, San Bernardino, Riverside, and Ventura.
These layoffs have been announced at a time when California is about to increase the minimum wage for fast-food workers to $20 per hour in April 2024. The increase is targeted at balancing the cost of living for Californians.
In the face of these unprecedented layoffs, many Pizza Hut franchises are resorting to third-party delivery options like Uber Eats, GrubHub, and DoorDash. However, the monetary implications are not lost on the affected drivers. According to one Pizza Hut driver, he was offered a $400 severance to remain working until his layoff date on Feb. 5. Expressing his disappointment to Business Insider, he concluded that the compensation equated to just $3 monthly for his nine years of service, calling it “a slap on the face.”
Pizza Hut noted that it was “aware of the recent changes to delivery services at certain franchise restaurants in California.” The company told Business Insider, “Our franchisees independently own and operate their restaurants in accordance with local market dynamics and comply with all federal, state, and local regulations while continuing to provide quality service and food to our customers via carryout and delivery.”
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