California Pizza Hut franchises have announced they will terminate all in-house delivery driver positions, a measure taking effect before a state-mandated increase in the minimum wage. This action, aligning with new pay regulations set to kick in April 2024, will impact hundreds of Pizza Hut outlets across several counties including Los Angeles, Orange, and San Bernardino, according to reports from FOX LA and KTLA.
The layoffs are a reaction to the upcoming rise in the minimum wage to $20 per hour as stipulated by Assembly Bill 1228, an effort by lawmakers to help fast-food workers manage to keep up with escalating living costs. Operators PacPizza LLC and Southern California Pizza Co. delivered WARN Act notices to California's Employment Development Department, indicating they have elected to "eliminate first-party delivery services," as per federal WARN Act notices cited by Business Insider.
Specifically, Southern California Pizza Co. is set to cut about 841 delivery driver jobs. State law requires employers to give a 60-day heads-up before conducting mass layoffs, under the Worker Adjustment and Retraining Notification (WARN) Act. The layoffs will stream through February, affecting workers across numerous regions.
Pizza Hut, under the corporate umbrella of Yum! Brands, Inc., also owns popular chains such as KFC and Taco Bell and has acknowledged recent adjustments in delivery services. Yum! Brands states that each franchisee is independent, tasked with navigating the challenges of the local market to align squarely with regulatory compliance, as highlighted in a statement obtained by Business Insider.
As California's wage landscape shifts, customers may soon expect fast-food giants like Chipotle and McDonald’s to adjust their prices, mirroring the cost of higher worker wage bills. These companies have already hinted at price hikes to balance the scales. However, for the pizza aficionados across California, their pies will henceforth come via third-party delivery services like Uber Eats, GrubHub, and DoorDash, marking the end of an era for Pizza Hut's in-house delivery.
