Welcome to California sign on California-Oregon border (Photo: Evan Symon for California Globe)
Pizza Hut Fires Over 1,200 Drivers In California Before New $20 Minimum Wage Comes Into Effect
More fast food firings are expected before April 1st
By Evan Symon, December 26, 2023 4:03 pm
Multiple Pizza Hut operators throughout California announced on Tuesday that they would be laying off hundreds of drivers before the new state minimum fast food wage of $20/an hour comes into effect on April 1st.
The new law, Assembly Bill 1228, has been one of the most contentious of the year. Originally, the bill would have raised the minimum to $22 an hour and hold franchise corporations accountable for labor law violations at individual locations. In addition, thanks to a new Fast Food Council created from a new law signed last year (AB 257), benefits like paid leave and predictive scheduling would be introduced. Fast food companies swiftly took action to hold a referendum on the minimum wage, as well as more electronic kiosks going up to replace cashiers.
After months of back and forth, it was agreed earlier this year that AB 1228 would be altered to have minimum wage for fast food workers bumped only to $20 an hour rather than $22, with local governments prohibited from raising it even further, in exchange for dropping the referendum as well as other smaller provisions.
Following passage in October, fast food companies and groups have been warning of dire consequences. This has included more automation, higher prices, reliance on third party companies, and numerous layoffs to help stay profitable.
“The law is going to have a wage impact for our California franchisees,” said McDonalds CEO Chris Kempczinski during an earnings call in late October. “I don’t think at this point, we can’t say exactly how much of that is going to work its way through pricing.”
“Certainly, there’s going to be some element of that that does need to be worked through with higher pricing. There’s also going to be things that I know the franchisees and our teams there are going to be looking at around productivity. How all of that plays out, there will certainly be a hit in the short-term to franchisee cash flow in California, tough to know exactly what that hit will be because of some of the mitigation efforts.”
Many other franchises have, in the past several months, reduced seating and installed more automated kiosks in stores to reduce labor in preparation for the higher wage. Others, like McDonalds and Chipotle, have announced higher prices. This led to the announcement by multiple Pizza Hut franchises on Tuesday that they would be eliminating all drivers as a cost saving measure. In total, over 1,200 drivers have been laid off so far, with restaurants being affected in Los Angeles, Orange, Riverside, Sacramento, Ventura and San Bernardino counties.
Massive Pizza Hut driver layoffs in California
“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,” said the Employment Development Department through a WARN Act notice on Tuesday. “Another operator, Southern California Pizza Co. also announced layoffs of around 841 drivers across the state.”
Those layoffs are currently set to occur now through early February, with severance pay being offered. Following the layoffs, the Pizza Hut locations will rely on delivery companies such as Uber Eats, GrubHub and DoorDash to deliver pizzas.
Experts told the Globe on Tuesday that more fast food layoffs are likely to be announced in the coming months before the April 1st date when fast food minimum wages go up from $16 to $20.
“They have been warning everyone like crazy that things like this were going to happen,” said fast food restaurant consultant Linda Medina to the Globe. “A lot of people in favor of the law were saying how companies would be warning of layoffs but then just rolling with it. Well, this kind of shut them up today.”
“And this is just two operators for Pizza Hut. It’s not even January. This may very well be the starting gun. Other pizza franchises and other operators may follow their example now that they did this. I know that many have it in discussions now that they have done this. Other places, once those touchscreens are in, that’s a lot of cashiers out. Some other places are looking more into pre-made things so they can save on preppers, or have more simplified ways to prepare food. Soda machines are also being moved behind the counter too.”
“It’s sad that it has to come to layoffs for some, but that extra $4 an hour is such a huge pay bump all at once. It should have been much, much more gradual, but they really didn’t think this through. They thought, hey, let’s just give them more money, let’s give people a livable wage. It’s a nice sentiment, but wow, they didn’t foresee the consequences. Now, over a thousand people are losing their jobs because of [Assemblyman] Chris Holden (D-Pasadena) and others in Sacramento. Not the franchise, the people who made this law.”
“And like I said. this is just the beginning. Who knows how many more thousands are going to be out of work now.”
As of Tuesday evening, it is currently unknown how many more fast food operators are planning cuts by April.
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Thomas Sowell’s Basic Economics!
Required reading for all to understand this was going to be the consequence.
Remember there are 81 million stupid people out there.It doesn’t take a genius to know raising the min wage law to 20 hr. on fast food workers was going to cause thousands of people out of jobs . Because the owners are going to have to o raise the prices of there meals and run skeleton crews just to make there p&L reports plus there stores won’t be so busy.So who real loses is tbe people out of a job and anyone on ssi or disability. mostly the elder on fixed incomes but who really is not going to be happy are the owners of these restaurants they are going to have to micro manage every product and waste in there stores to make profits.over all the service will suffer and owners are not Going to be make what they are used to.
That’s what happened you have a stupid governor in California he’s an idiot do you really want him to be president
Unfortunately for all California residents, it appears that Marx’s “Das. Kapital” and Alinsky’s “Rules for Radicals” is required reading for the majority of California legislators…
That is, if they can read at all…
Oh yeah? A 4 dollar increase for 1200 workers would have bankrupted them? I’ve looked up the parent company of pizza hut. They had a profit of 1.3 billion dollars in 2023. Do you know how much they would have needed to pay those 1200 people, extra? 800k. So before you start talking shit woman, stop to think. Oh yeah let’s pay our workers shit to not fire them. Incredible how fucking stupid some of you Americans are. Those fucking mega corporations are bleeding you dry, yet you agree with them for some reason.
You fail at basic math, which is part of the whole problem here.
$4x1200x40x52 (assuming full time, no overtime, etc.) = $10 million.
CA literally just forced them to either fork over $10 million, or fire them. Stupidity like yours is not in short supply.
No, the fools in Sack-0-Tomatoes didn’t raise the minimum wage to $4, now you add in FICA taxes that the employer pays, you add in Disablility insurance, Unemployment Insurances all of a sudden that $4 is $6 or more. We’ve been down this road before an yet the fools NEVER LEARN.
Wait, HK, you’re assuming that these Democrats actually know about the addition tax expense to the owner/operators…
They just think of it as an additional revenue stream to liberally dispense to their special interests…
Another reason why I say that private sector business experience should be a prerequisite for elected office, and not a rabble-rouser, er, “community organizer”…
Morons….
The extraordinary ignorance of your argument delivered with clueless smug nastiness is very persuasive. (not)
Pizza Hut might have profited $1+ bil, but Im pretty sure the middle class owners of these franchises aren’t clearing as much money as you think. Its funny how stupid you Europeans can be… 😉
LOL @ you for thinking someone deserves $20 an hour for delivering pizza. It is literally one of the lowest skill jobs around.
You must be an emotion-driven liberal, using that kind of language…
Your mother must be SO proud of her little snowflake….
You clearly have zero experience running a company or being responsible for individual unit and division profits. If it’s so easy, please risk all of your money, take out loans, and you take responsibility for other people’s wages. You are so out of touch with business and reality, I’m sure none of this will make sense. The guy with no experience and nothing at risk, knows more about how these things work than those actually doing it lol?
Quit smoking from that pipe of yours. The corporate doesn’t own those franchises. Those are smaller companies or individuals that licenses from the corporation to use their brand and such. They don’t share that profit of 1.3 billion. Stop blaming mega corporations when they have no part in it.
This is what is gonna happen when California keeps increasing the minimum wage each year. Underperforming businesses will be forced to either reduce the working hours of their employees or just lay them off. You had that chance to fire Gov. Hairgel Newsom over 2 years ago and blew it.
But do keep voting Democrat. It’s been working out so well. LOL
I’m sure you live comfortably with wherever you make and I’m sure is way more than $ 20 an hr.
Now is the time for the people of California to boycott all those companies who don’t deserve to be in business if they can’t pay living wages
Spoken like a brainwashed commie union activist.
There is no such thing as a living wage. But let’s try to define one : no Netflix, no Disney+, no spotify, no tennis shoes over $39, no pants over $35, now jewelry period — for groceries you get beans, rice, chicken, eggs, oranges, and broccoli — no soda, no coffee, no beer, no cigarettes, no wine — you can have an android phone from 3 years ago — if you need a car you can have a 5 year old used one, no going out to eat, no going out to the movies — you really don’t need any more than that to live — if you want more then make yourself more useful so that people will be WANT to pay for your SKILLS. — The problem is people don’t want a living wage — they want a luxury wage — and they want for doing no skill work — they don’t want to put in the time and effort to improve themselves — it takes no skill to deliver pizza — literally any 16 year old could do it as their first job
That’s what happened you have a stupid governor in California he’s an idiot do you really want him to be president
There are many jobs that are low skill, even college based jobs. Have you ever worked a restaurant or delivered? Not as simply simon as you think. Fast-paced and little room for mistakes. My son works at a private local pizza shop and rakes nearly $35/hr with tips. My cousin owns the joint and the place is very popular. I wish my kid (20yrs) would work towards something more in his life (oh he will) but right now he’s living with me and banking it all away. 20K in the bank and counting.
happy 30th birthday to your son!
I still maintain that the electronic voting systems tabulation function was compromised during the trusted build updates leading up to the recall election – focus in on the weaknesses described from page 18 or 19 onwards… (if they still have the PDF posted and active)
https://votingsystems.cdn.sos.ca.gov/vendors/dominion/dvs510staff-report.pdf
I can guarantee you newsome stole the recall results. The polls showed half the demokrauts never bothered to vote for scum bag newsome. So how did he win the recall effort. Election fraud.
Even though there are many deluded voters who vote for Democrats, elections have been stolen for years in California with Democrat voter fraud and rigged voting machines.
What people need to realize is the CA economy has done very well with the Dems. So well many were left behind. The minimum wage increase helps but honestly the fast food jobs were meant for high school and maybe some college students not as a career or especially not to raise a family.
There are lots of people working harder, in positions that require more skill, in less nice surroundings, and for less money than fast-food workers; why are fast-food workers so special? Government control of wages is called Communism where I come from.
It’s all part of the Democrat playbook, Ramet…
It started with “a chicken in every pot” back in the Great Depresson days, and continues until today when the compassionate dictators with a D after their names promise naive, uninformed voters “a living wage” and then deliver them a pink slip and a trip to the unemployment office…
This is what happens when “community organizers” are (s)elected into legislative offices, t
rather than businesspeople who have actually worked in the private sector and have a fundamental understanding of Finance and Economic theory and practice….
Try voting for a majority of Republicans, naive voters, and see if your economic life improves….
Remember there are 81 million stupid people out there.It doesn’t take a genius to know raising the min wage law to 20 hr. on fast food workers was going to cause thousands of people out of jobs . Because the owners are going to have to o raise the prices of there meals and run skeleton crews just to make there p&L reports plus there stores won’t be so busy.So who real loses is tbe people out of a job and anyone on ssi or disability. mostly the elder on fixed incomes but who really is not going to be happy are the owners of these restaurants they are going to have to micro manage every product and waste in there stores to make profits.over all the service will suffer and owners are not Going to be make what they are used to.
While I do see where the problem is… I think it’s bullshit to blame people for wanting a liveable wage, at a time when gas prices and rent can spike without warning, yet a $4 increase in wages all at once is too much FOH
You should run to the boss’ office jump on the desk and start twerking in faces…..like the NBC jooish kids did at Comcast when they bought NBC. (NBC kids thought it was the other way around-oops) Big picture, small steps.
And so it begins……. the bumpy and scary road to business disaster. Everyone was warned!
This will have ramifications for small business (and large business) BEYOND fast food franchises. The Mom & Pop restaurant worker will demand McDonald’s pay and Mom & Pop had better meet it or else. And NO ONE benefits except the ne’er-do-well unions and politicians who buy votes with this nonsense. Costs go up for all of us (including the $20 minimum wage worker, DUH), jobs disappear, cold and alienating kiosks and robots replace people, those who get the raise and DIDN’T lose their jobs find that the “extra money” disappears into the ether; it’s a nightmare. Wake UP people of California. (Not you guys commenting here —- you know what’s what – 🙂 )
These commie legislators and commie union destroyers DEPEND on this kind of ignorance. Throw in some election rigging to make up the difference and the Road to Disaster is assured. Good luck rolling this back in California – it’s not going to happen.
When the gov dictates what the min wage is all that will happen is a big layoff and a hiring freeze these companies have to make a profit or close their doors and a lot will either close or move to another state The company will have to raise prices and people will come to a point that they will not pay any more they are about to find out. California has become such a stupid place.
It’s probably for the best
Just think of all the opportunities that this opens up for you!
All you delusional Trump Voting, Conspiracy Morons will finally be allowed the chance to acquire one of those vaunted, fantastic, high-paying fast food jobs
( let’s be honest, none of you lazy, whiny slugs would be able to handle any of those stressful jobs!
I’d give you two days before any of you feebly give up and start complaining that some immigrant took the fast food job that could not do ).
On a side note,
all you FatAsses should take this opportunity to stop ordering fast food
And start making healthy alternatives at home!
Just sit your gluttonous behinds on your sofa,
Place your order on your Walmart app
And then begin to explore the world of fruits and vegetables!
Your welcome,
Conservatives Fatties!
👍
“You’re” welcome, not “Your” welcome.
Economists have established the fact that markets take of themselves best without the overzealous overreach of well-intentioned frat boy governors from san fran. This includes the markets for products as well as employment.
You sound nice
Ha ha
Government employ, most particularly those in elected positions, is where the stupid go to earn a living and prosper as they are not wanted, nor needed anyplace else. This is particularly true in communist domains such as California.
The laws of economics are as certain as the law of gravity. Get over it libs!
If you want a pizza take the bus or ride your bike and get it yourself.
Never again tipping anyone for anything. I’m done with it, 100%.
The hell with pizza hut, nasty pizza and greedy. There’s more than enough pizza places to cover their whiny vomit food if they want to close down. $4 more, oh no, they won’t make 10 more million in profits out of 2 billion. They can go ef themselves and everyone that thinks like them.
LOL @ calling pizza hut greedy — the greedy ones are the no skill workers wanting $20 an hour to deliver pizza — that’s a job that any 16 year old with zero experience in anything could do do
First places to close shop will be in POOR areas, yet these areas will continue to vote Democrat without realizing they are voting for their own doom. Soon seeing a business outside of checks cashed, liquor, gas stations, and smokes will be a rare find. Every time I go into a poor area they always seem to have highest priced gas and food – yet they do not realize Democrats have run CA for 20 years solidly and over 50 years majority.
Whiners that bitterly complain about a “living” wage should get the skills and work ethic to make a livable wage. Low skill jobs like pizza delivery are primarily held by people earning some extra cash after their other job or they are kids earning a little money while attending school.
If you expect to be able to afford a mortgage, insurance, car payments etc on a part time delivery job you should check into the nearest mental institution.
Democrats destroy everything they touch.
This’s what happens when our tax dollars are spent in support of genocide and killing of innocents. wake up America.. stop supporting zionist and genocide maniacs.
For a moment I thought you were referring to abortion and the covid jab genocide currently ongoing and promoted by the US government but I see you are a pro-genocide leftist who calls resisting genocide a bad thing.
No kidding CW. I actually thought the same thing at first glance, then realized my mistake
Ahh the results predicted by everyone except the retards in Sacramento. So predictively stupid and no surprise, these same retards will be re-elected next cycle too, no doubt!