Pizza Hut plans to lay off 1,200 of its delivery drivers in California following a new policy increasing the state’s minimum wage.
Operators of the fast-food chain filed notices to comply with the Worker Adjustment and Restraining Notification Act to eliminate their delivery service next year, Business Insider reported Dec. 22. Most fast-food employees will begin earning at least $20 per hour starting in April 2024.
For every action there is an equal reaction ..California Pizza Hut franchises announce layoffs of delivery drivers before new $20 minimum wage:
— Michael Reagan (@ReaganWorld) December 26, 2023
“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 federal WARN act filed by the fast-food operator with California’s Employment Development Department said, according to Business Insider.
Pizza Hut locations in Los Angeles, Orange, San Bernardino, Riverside and Ventura counties will be affected by the layoffs, the outlet reported. Many restaurants are prepared to turn to third-party delivery apps like Uber Eats, GrubHub and DoorDash.
The minimum wage hike was initially proposed to offset the expensive cost of living in California, according to the outlet. A Pizza Hut delivery driver told Business Insider that he was offered a $400 severance if he continued working until Feb. 5, the set date for layoffs. (RELATED: Pizza Hut Introduces Snake Meat In Chinese Markets)
“The money they are giving us as severance pay is a slap on the face,” the Pizza Hut delivery driver said. “It comes to a $3 a month for nine-plus years of service.”