With the minimum wage in California increasing to $20 an hour for fast food workers in 2024, some Pizza Hut franchisees say they’re preparing to eliminate jobs as well as delivery options for customers.
As first reported by ABC News Los Angeles station KABC, two major Pizza Hut franchisees with restaurants in Orange, Los Angeles, Riverside, San Bernardino and Ventura counties are planning layoffs that would impact 1,200 workers.
A Pizza Hut store is seen on Nov. 1, 2023 in Austin, Texas.
Brandon Bell/Getty Images, FILE
The mass layoffs would also reportedly impact another 800 workers at Pizza Hut locations in Sacramento, Central California, Southern Oregon, and the Reno-Tahoe area, according to KABC.
Yum! Brands, the parent company of Pizza Hut, as well as other fast food companies including KFC and Taco Bell, did not immediately respond to ABC News’ request for comment.
Customers of Pizza Hut locations eliminating in-house delivery will instead have to turn to third-party apps such as DoorDash or UberEats for food delivery.
In this June 29, 2018 file photo, a Pizza Hut delivery driver is seen in Shreveport, La.
Shannon O’hara/Getty Images for Pizza Hut, FILE
The wage legislation, AB 1228, which was signed into law by California Gov. Gavin Newsom in late September, is the catalyst for this decision by operators, the franchisees say.
The new law goes into effect in April and will boost minimum wage for by $4 to $20 per hour.
Other fast food companies, including McDonald’s and Chipotle, previously said the new law would impact the respective chains’ operating costs and could potentially change menu pricing for customers.
Although a decision has not been made official, Chipotle CEO Jack Hartung said on a November earnings call that the pricing at the popular fast-casual Mexican restaurant would have to change “to take care of the dollar cost” and cover the new margins.
“We are definitely going to pass this on. We just haven’t made a final decision as to what level yet,” he said.
