Delivery Services Discontinued
Multiple Pizza Hut franchises in California have announced plans to lay off delivery drivers in anticipation of an upcoming increase in the minimum wage for fast food workers. These franchises have filed notices to comply with the Worker Adjustment and Retraining Notification Act, stating that they will be discontinuing their delivery services. This decision comes as Pizza Hut operators brace themselves for the impact of the wage increase.
Impact on Employment
According to a federal WARN Act notice filed by PacPizza, LLC, operating as Pizza Hut, all delivery driver positions will be eliminated. Another operator, Southern California Pizza Co., has also announced layoffs, affecting approximately 841 drivers across the state. This move will impact Pizza Hut locations in Los Angeles, Orange, San Bernardino, Riverside, and Ventura counties.
Shift to Third-Party Delivery Apps
In the wake of these layoffs, many Pizza Hut franchises will be relying on third-party delivery apps such as Uber Eats, GrubHub, and DoorDash to fulfill their delivery orders. This shift in strategy is seen as a response to the increasing cost of labor and the need to adapt to the changing fast food landscape.
Minimum Wage Increase
These layoffs have been announced several months ahead of the minimum wage increase that will affect most fast food workers in California. Beginning in April, these workers will start earning a minimum wage of $20 per hour. The wage increase was proposed as a means to address the rising cost of living in the state.
One Pizza Hut delivery driver expressed frustration with the layoffs and the severance package offered. The driver stated that they were offered a mere $400 severance if they remained employed until their February 5 layoff date. They described this amount as “a slap on the face” considering their nine-plus years of service.
FOX Business has reached out to the Pizza Hut operators for comment but has not yet received a response.