Pizza Hut Franchises in California Prepare for Layoffs Ahead of Minimum Wage Increase
Multiple Pizza Hut franchises in California are taking preemptive measures to curb rising labor costs by planning to lay off delivery drivers, as the state’s fast-food workers prepare for an increase in the minimum wage. Notices were filed under the Worker Adjustment and Retraining Notification Act (WARN), indicating that delivery services would be discontinued.
PacPizza, LLC, operating as Pizza Hut, recently made the decision to eliminate first-party delivery services, resulting in the termination of all delivery driver positions. Another Pizza Hut operator, Southern California Pizza Co., also announced the layoffs of approximately 841 drivers across multiple counties in the state.
To compensate for the loss of in-house delivery services, Pizza Hut franchises plan to rely on popular third-party delivery apps such as Uber Eats, GrubHub, and DoorDash. By partnering with these delivery platforms, franchises hope to maintain efficient delivery operations while reducing labor costs.
The decision to lay off delivery drivers was made months in advance of the minimum wage increase, which is set to take effect in April. Pizza Hut operators anticipate significant financial strain due to the proposed hike in wages and want to prepare for the rising cost of living in California.
Despite the strategic timing of the layoffs, many drivers are expressing dissatisfaction with the compensation offered to them. One Pizza Hut delivery driver criticized the $400 severance offer, arguing that it amounted to a mere $3 per month for over nine years of service. The drivers feel that their years of dedicated service to Pizza Hut should be rewarded with more substantial severance packages.
Efforts to reach Pizza Hut operators for comment have been unsuccessful thus far, leaving many drivers and customers waiting for further explanations regarding the decision and its consequences.
As California prepares to raise the minimum wage, it seems that these Pizza Hut franchises are taking steps to adapt and anticipate the financial pressure of increased labor costs. However, concerns over fair compensation for affected workers and the potential impact on quality of service remain unresolved.
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