Several Pizza Hut franchises in California are set to lay off hundreds of delivery drivers as the fast-food chain braces for an increase in the minimum wage for fast-food workers next year. The restaurant operators filed notices to comply with the Worker Adjustment and Retraining Notification Act, warning of discontinuing delivery services.
According to the notices, PacPizza, LLC, the operator for Pizza Hut, has decided to eliminate first-party delivery services, resulting in the elimination of all delivery driver positions. The move will affect locations across Los Angeles, Orange, San Bernardino, Riverside, and Ventura counties.
Another operator, Southern California Pizza Co., has also announced layoffs of around 841 drivers across the state. Many Pizza Hut franchises will turn to third-party delivery apps, including Uber Eats, GrubHub, and DoorDash, as a result.
The decision to lay off workers came months ahead of the increased minimum wage for fast-food workers in California. Effective April of next year, workers will start earning a minimum of $20 per hour, a proposed move to offset the increasing cost of living for Californians.
The layoffs have created strong reactions among unions, who argue that firing workers ahead of a statewide minimum wage increase is not in the labor code or the spirit of the new minimum wage law. Furthermore, labor experts suggest that the layoffs, designed to save labor costs, may also impact the customer’s quality of service.
Pizza Hut, a subsidiary of Yum! Brands, is the world’s largest pizza chain by units, with over 18,000 locations worldwide. It is not yet clear how many locations will be affected by the layoffs, but the move is expected to reverberate across the state.