Thousands of restaurant workers are expected to lose their jobs as a result of California’s latest minimum wage hike.
KABC-TV reported that many Pizza Hut franchises in the Golden State are preparing to lay off their delivery drivers ahead of the introduction of a $20 minimum wage, which goes into effect on April 1, 2024.
“PacPizza, LLC, operating as Pizza Hut, has made a business decision to eliminate first-party delivery services and, as a result, the elimination of all delivery driver positions,” the company wrote in a federal WARN Act notice filed with the state’s Employment Development Department, according to Business Insider.
The layoffs will specifically impact 1,200 workers across Orange, Los Angeles, Riverside, San Bernardino and Ventura counties, KABC reported.
The move is a direct response to Assembly Bill 1228, put forward by left-wing Democrats and signed into law by Gov. Gavin Newsom in September, which raises the minimum wage for fast food workers from $16 to $20 an hour.
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Who could have predicted this entirely predictable outcome?
“Two large Pizza Hut operators in California are laying off all their delivery drivers ahead of a new state law that raises the minimum wage for fast-food workers to $20 an hour, Business Insider reports.” https://t.co/jK08lN0MGv
— Carol Roth (@caroljsroth) December 26, 2023
As a result of the layoffs, Pizza Hut customers will be required to place their orders through third-party delivery apps, such as Uber, GrubHub and DoorDash in order to get a pizza delivered.
Did Pizza Hut make the right decision?
In an interview with KTVU, one Pizza Hut customer said he was disappointed with the decision.
“I think it was a horrible decision,” Hao Ngo of San Jose said.
“We should definitely put money in the community, so everybody can survive. Everybody out here is having a hard time right now, and firing people isn’t the solution.”
“I feel like we don’t got a choice,” he continued. “As for the people, if they’re going to raise the price, I’m still going to have to get it. So, we’re actually really suffering on the back end.”
In addition to the Pizza Hut employees who will lose their jobs, the minimum wage hike is expected to impact 30,000 restaurants across the state of California, potentially putting thousands more jobs at risk, Business Insider reported.
Another popular pizza company, Southern California Pizza Co., has also announced that 841 jobs will be lost.
Meanwhile, companies including McDonalds and Chipotle have already confirmed they will raise their prices in response to the new regulations.
A representative for Pizza Hut’s parent company, Yum! Brands, told Business Insider that it was “aware of the recent changes to delivery services at certain franchise restaurants in California.”
“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,” the representative explained.
