In a recent revelation by Business Insider, two prominent Pizza Hut franchise operators, managing numerous outlets throughout California, are set to terminate all delivery drivers in February, impacting over 1,200 jobs.
Business Insider claims to have obtained exclusive financial filings via federal Worker Adjustment and Retraining Notification (WARN) Act notices, not yet publicly disclosed. The documents suggest that the Pizza Hut franchisees are taking this drastic step in response to the impending increase in California's minimum wage for fast food workers scheduled for 2024.
According to the new legislation, fast food chains in California with 60 or more locations nationwide are obligated to raise employee wages to $20 per hour by April, exceeding the state's new minimum wage of $16 effective January 1.
Scott Ward, owner of the local pizzeria Stone Pizza in Roseville, acknowledges the inevitability of such corporate decisions, emphasizing that his establishment, being a mom-and-pop pizza place, will continue daily deliveries.
While Ward's business remains unaffected due to its single-location status, he points out that larger corporations may resort to job cuts to offset the increased labor costs, a sentiment shared by others in the industry.
Advocates for the minimum wage hike argue that it is a necessary move to provide a livable wage for fast food workers. Maria Hernandez, a manager at a Folsom-based fast-food chain and a union member, welcomes the change, expressing relief at the prospect of earning a more decent wage.
With Pizza Hut discontinuing its in-house delivery services, customers will now have to rely on app-based platforms like Doordash and Uber Eats. Some customers, like Jeremiah Basarab, are dismayed by the decision, fearing that it might lead to further price hikes and adversely affect the workforce.
Business Insider also reports that another Pizza Hut franchisee, Southern California Pizza Co., and its affiliates are following suit, cutting all in-house delivery services and letting go of more than 840 drivers, as per a December WARN Act notice.
Despite attempts to seek comments from Pizza Hut's parent company Yum! and PacPizza, the franchise operator for the affected California stores, CBS13 has yet to receive a response.
Source: CBS NEWS