Pizza Hut franchisees lay off more than 1,200 delivery drivers in California

[LuigiMiami631]

In April, California fast-food workers are set to get a nearly 30% pay bump to $20 an hour.
Fast-food chains such as Chipotle say they'll raise prices to offset the state's higher labor costs.
Two Pizza Hut franchisees are laying off more than 1,200 delivery drivers in California.

Two Pizza Hut operators in California are eliminating their in-house delivery services at hundreds of stores, resulting in more than 1,200 driver layoffs, according to federal employment notices reviewed by Business Insider.

The layoffs, effective throughout February, affect Pizza Hut delivery drivers across California, including at Sacramento, Palm Springs, and Los Angeles locations. The Pizza Hut franchisees are reducing staff as fast-food chains in the state brace for a new law that increases worker pay to $20 an hour in April.

"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," a federal WARN Act notice filed by the fast-food operator with the state's Employment Development Department said.

The Worker Adjustment and Retraining Notification Act requires employers to give notice of plant closures or mass layoffs.

Other PacPizza affiliates filing notices included Southern PacPizza LLC, CalPac Pizza LLC, and PacPartners LLC.

A second Pizza Hut franchisee, Southern California Pizza Co., and its affiliates are also discontinuing its in-house delivery services and laying off about 841 drivers, according to a December 1 WARN Act notice.

The company operates dozens of stores in Orange, Los Angeles, Riverside, Ventura, and San Bernardino counties.

A driver who spoke on condition of anonymity for fear of retaliation told BI that he was offered $400 severance pay if he stuck around through his February 5 layoff date.

He's been a driver for nine years.

"The money they are giving us as severance pay is a slap on the face," he said. "It comes to $3 a month for nine-plus years of service."

Gene Erdman, Southern California Pizza Co.'s chief people officer, did not respond to a request for comment. The franchise also operates under the names SoCal South OC LLC and SoCal Pizza Holdings LLC.

Lisa Hough, the director of human resources for PacPizza in San Ramon, California, was listed as the contact on all five WARN Act notices signed by the company's president, Brian E. Thompson. Hough and Thompson did not respond to a request for comment.

Customers will have to rely on third-party delivery apps to get Pizza Hut delivered from these locations. Most Pizza Hut restaurants in the state work with third-party delivery apps, such as DoorDash, Uber Eats, and Grubhub.

It's unclear whether other Pizza Hut franchisees plan to scrap in-house delivery in California.

Pizza Hut, owned by the Taco Bell parent company Yum Brands, said the company was "aware of the recent changes to delivery services at certain franchise restaurants in California."

"Our franchisees independently own and operate their restaurants in accordance with local market dynamics and comply with all federal, state, and local regulations while continuing to provide quality service and food to our customers via carryout and delivery," Pizza Hut told BI.

Mark Kalinowski, a restaurant-industry analyst, wrote in a note this week that he expected "more harm to come" in various ways as fast-food chains "take action in an attempt to blunt the impact of higher labor costs."

Chains such as Chipotle and McDonald's said they planned to pass the costs of higher wages in California to customers by raising menu prices.

In 2022, Gov. Gavin Newsom of California signed the FAST Act into law. It called for the minimum wage for fast-food workers to increase to $22 an hour in 2023. But corporate chains such as McDonald's, Chipotle, and Chick-fil-A, as well as franchise advocacy groups, fought the law. A coalition of restaurant-industry organizations said the law could raise costs for fast-food restaurants by $3 billion. They rallied to get a referendum on the ballot.

A new law, AB 1228, replaced the controversial FAST Act this year. The minimum-wage increase for fast-food workers was changed to $20 an hour. The new law was viewed as a compromise between the labor unions representing fast-food workers and the restaurant industry.

https://www.businessinsider.com/cali...ge-law-2023-12

TLDR:

Two Pizza Hut franchisees in California are eliminating their in-house delivery services, resulting in over 1,200 driver layoffs. The layoffs affect delivery drivers across multiple locations, including Sacramento, Palm Springs, and Los Angeles.

The move is part of a larger effort to reduce staff as fast-food chains prepare for a new law that increases worker pay to $20 an hour in April. The Worker Adjustment and Retraining Notification Act requires employers to give notice of plant closures or mass layoffs.

Customers will have to rely on third-party delivery apps to get Pizza Hut delivered from these locations, as most Pizza Hut restaurants in the state work with DoorDash, Uber Eats, and Grubhub.
Pizza Hut, owned by Yum Brands, said the company was "aware of the recent changes to delivery services at certain franchise restaurants in California."

The new law, AB28, replaced the controversial FAST Act, which called for the minimum wage increase to $22 an hour by 2023 in California.


I like how the advocates of "pay a fair livable wage" don't realize the repercussions of it when you decide to raise it.

[FelixTheCat1919]

I'm surprised restaurants of any kind can still afford to operate in California. They think restaurant workers should be able to live like upperclass folks.

[TheMiscHatesHim]

Fuark, looks like I'm going to need to pick up my Pizza Hut Big Dinner Box myself now.

[OliverHeldens]

I'm surprised they had their own delivery to begin with.

If this ends up forcing these crap franchises out of the state and causes more local business to pop up, it's probably a good thing ultimately. Fast food is still extremely popular in California regardless of the higher costs, so a $20 minimum wage isn't actually doing as much harm as people think.

[samsbolton]

https://www.businessinsider.com/cali...ge-law-2023-12

TLDR:

Two Pizza Hut franchisees in California are eliminating their in-house delivery services, resulting in over 1,200 driver layoffs. The layoffs affect delivery drivers across multiple locations, including Sacramento, Palm Springs, and Los Angeles.

The move is part of a larger effort to reduce staff as fast-food chains prepare for a new law that increases worker pay to $20 an hour in April. The Worker Adjustment and Retraining Notification Act requires employers to give notice of plant closures or mass layoffs.

Customers will have to rely on third-party delivery apps to get Pizza Hut delivered from these locations, as most Pizza Hut restaurants in the state work with DoorDash, Uber Eats, and Grubhub.
Pizza Hut, owned by Yum Brands, said the company was "aware of the recent changes to delivery services at certain franchise restaurants in California."

The new law, AB28, replaced the controversial FAST Act, which called for the minimum wage increase to $22 an hour by 2023 in California.


I like how the advocates of "pay a fair livable wage" don't realize the repercussions of it when you decide to raise it.

What a low iq take

Who subsidizes the low wages so that these workers can live? The taxpayer. You.

You’re a dolt

[miscinbro]

So you’re saying that companies that rely on delivery have found a way to out-source it to a third party that doesn’t cost them anything? And it’s surprising they are laying off their own people? Wage isn’t the drove force here, it’s a constant drive to lower costs at all costs all the time.

[Roldz]

Just lol @ going out to eat anymore.

Who ever would have thought that paying unskilled bottom of the barrel food workers more than they deserve would increase prices everywhere else?

Most of those third party delivery services suck massive cock.

[jimbob007]

[url]https://www.businessinsider.com/california-pizza-hut-lays-off-delivery-drivers-amid-new-wage-law-2023-12[/url

I like how the advocates of "pay a fair livable wage" don't realize the repercussions of it when you decide to raise it.

And what wages do the Pizza Hut bosses take home? How many tens of billions does the company make every year? Lol at 15 quid an hour being too much for employees. Just unfettered greed from giant corporations-they can never have enough can they? Blaming workers for your food prices going up, when Pizza Hut could easily absorb the pay rise & still be making 10 billion plus profit a year, the bosses could even take a slight pay cut on their 6 million a year earnings-but no, they just want to screw the workers & the customers.

[LuigiMiami631]

I'm surprised they had their own delivery to begin with.

If this ends up forcing these crap franchises out of the state and causes more local business to pop up, it's probably a good thing ultimately. Fast food is still extremely popular in California regardless of the higher costs, so a $20 minimum wage isn't actually doing as much harm as people think.

\

California already has a budget deficit. With the amount of people getting government handouts in California, I wouldn't be surprised people are still buying fast food with EBT.

And what wages do the Pizza Hut bosses take home? How many tens of billions does the company make every year? Lol at 15 quid an hour being too much for employees. Just unfettered greed from giant corporations-they can never have enough can they?

Re-read the article. It's franchises, totally different than the actually HQ. These are independently owned.

This ain't UK bro.

[RIKTER]

What a low iq take

Who subsidizes the low wages so that these workers can live? The taxpayer. You.

You’re a dolt

How much more are you paying if they dont have that low wage job?

Put it in those terms and those law paying jobs are actually saving tax payers quite a bit.

[jimbob007]

\

California already has a budget deficit. With the amount of people getting government handouts in California, I wouldn't be surprised people are still buying fast food with EBT.



Re-read the article. It's franchises, totally different than the actually HQ. These are independently owned.

This ain't UK bro.

Franchisees of PH & yes we have the same model here for junk food outlets. But it is Pizza Hut-it is what they want. The franchisees represent them, they pay PH a franchise fee, a percentage of all sales & for national marketing. PH can close them down any time they like.

https://www.cnbc.com/2020/08/17/pizz...ranchisee.html

[samsbolton]

How much more are you paying if they dont have that low wage job?

Put it in those terms and those law paying jobs are actually saving tax payers quite a bit.

What in the living fuk are you on about

Don’t give people anything if they are unemployed and capable of working pretty fkn simple

[Zelensky]

So you’re saying that companies that rely on delivery have found a way to out-source it to a third party that doesn’t cost them anything? And it’s surprising they are laying off their own people? Wage isn’t the drove force here, it’s a constant drive to lower costs at all costs all the time.

How are wages not the driving force when these layoffs are literally a DIRECT result of the forced wage increase?

[OliverHeldens]

\

California already has a budget deficit. With the amount of people getting government handouts in California, I wouldn't be surprised people are still buying fast food with EBT.



Re-read the article. It's franchises, totally different than the actually HQ. These are independently owned.

This ain't UK bro.

Taco Bell was actually cheaper in California than it was in my city in the Midwest. Whatever they're doing, it seems to be holding costs in check.

[LuigiMiami631]

Taco Bell was actually cheaper in California than it was in my city in the Midwest. Whatever they're doing, it seems to be holding costs in check.

They still have the $5 cravings box where I am at and like $1.29 bean, rice and cheese burritos.

While mcdonald's dollar menu is actually $2.50 for 4 nuggets, almost $3 for a mcdouble or mcchicken.

Don't get me started on Jack in the box or Carl's jr.

[OliverHeldens]

They still have the $5 cravings box where I am at and like $1.29 bean, rice and cheese burritos.

While mcdonald's dollar menu is actually $2.50 for 4 nuggets, almost $3 for a mcdouble or mcchicken.

Don't get me started on Jack in the box or Carl's jr.

Lol, it's true. I went to a Taco Bell in Thousand Oaks like 5 times because they still had the $5 Build your Own Cravings Box. That chit is $8.99 where I live now lol.

[DeputyDong5]

What in the living fuk are you on about

Don’t give people anything if they are unemployed and capable of working pretty fkn simple

nobody cares what you British *******s think.

[Islandboyo]

I'm surprised restaurants of any kind can still afford to operate in California. They think restaurant workers should be able to live like upperclass folks.

How should restaurant workers should be able to live?

[LuigiMiami631]

Lol, it's true. I went to a Taco Bell in Thousand Oaks like 5 times because they still had the $5 Build your Own Cravings Box. That chit is $8.99 where I live now lol.

Ya, it is crazy considering Thousand oaks and Westlake is a wealthy area.

Hell even In N Out has a full meal for around $8-9 I believe. Honestly a better option when Carl's jr Double western bacon cheeseburger costed me around $11 just for the sandwich.

[jimbob007]

I'm surprised restaurants of any kind can still afford to operate in California. They think restaurant workers should be able to live like upperclass folks.

On 15 bucks per hour?

[HereByMyself]

imagine bringing food from one counter to another counter and making small chit chat like whats yours plans for the day? and expecting to make enough to own a condo, own a car, take multiple trips to mexico/cuba every year LMAO!

[DeputyDong5]

Ya, it is crazy considering Thousand oaks and Westlake is a wealthy area.

Hell even In N Out has a full meal for around $8-9 I believe. Honestly a better option when Carl's jr Double western bacon cheeseburger costed me around $11 just for the sandwich.

yea double double meal at in n out is like 9 bucks. Chipotle bowl is like nine bucks. You can get a bag or 5 jr burgers from Braums for like 6 bucks. Add cheese for like 1.50.

[elterrible987]

people dont get it. they need to have skills, preferably in a niche industry and they need to consider AI when planning their careers.


Those low IQ enough to believe that politicians can just "help" them and "fix everything" with laws should be paying attention to this. Those retard unskill delivery drivers were probably looking forward to their demcrat's mandatory wage law taking affect and now look at them.

[DeputyDong5]

people dont get it. they need to have skills, preferably in a niche industry and they need to consider AI when planning their careers.


Those low IQ enough to believe that politicians can just "help" them and "fix everything" with laws should be paying attention to this. Those retard unskill delivery drivers were probably looking forward to their demcrat's mandatory wage law taking affect and now look at them.

can't help but just lol @ them hard. As an engineer, this is something I still worry about. Couldn't imagine being like late 20s or even in my 30s with ZERO skills/education... especially in the information era. It's never been easier to access information and learn something useful. There are legit MIT courses online for free.

These jobs are intended for 17 year old kids looking for gas $ to take their gf to the movies. They were never meant to support a family or enable financial independence. My first job was delivering pizzas... I made $2.50/delivery + tips. This was in like 07? And I was happy to do so. It's a job not a career.

[Dave22reborn]

And what wages do the Pizza Hut bosses take home? How many tens of billions does the company make every year? Lol at 15 quid an hour being too much for employees. Just unfettered greed from giant corporations-they can never have enough can they? Blaming workers for your food prices going up, when Pizza Hut could easily absorb the pay rise & still be making 10 billion plus profit a year, the bosses could even take a slight pay cut on their 6 million a year earnings-but no, they just want to screw the workers & the customers.

Look, this is what you wanted, accept the consequences.

[Dave22reborn]

How should restaurant workers should be able to live?

Let me guess, pay them a living wage, and yet none of you can explain what a living wage is......

[LuigiMiami631]

can't help but just lol @ them hard. As an engineer, this is something I still worry about. Couldn't imagine being like late 20s or even in my 30s with ZERO skills/education... especially in the information era. It's never been easier to access information and learn something useful. There are legit MIT courses online for free.

These jobs are intended for 17 year old kids looking for gas $ to take their gf to the movies. They were never meant to support a family or enable financial independence. My first job was delivering pizzas... I made $2.50/delivery + tips. This was in like 07? And I was happy to do so. It's a job not a career.

You would be surprised on how many idiots are out there.

Only people working these type of jobs as of late are Gen Z'ers. Couple of years back, it used to be all adults taking up these positions.

Even my local Vons, there is still a couple of 35-40 year olds working there since I was a kid still being a cashier. Since it is a union, their pay is probably in the $20-26 since they have been there so long.

But ya, there is tons of courses online, youtube, coursera, class central, linda, etc.

[CalmWind]

this is going to make everything else more expensive

there are skilled laborers who make 20-25 an hour

pizza hut is unskilled labor

[roosky11]

This is what I'm saying about the AI crap. Not that AI is part of this. But what do 1,200 people suddenly go do? Especially when just driving seems to be their "ability". The more the bottom level jobs get pushed out or replaced. What do all these people do? It's a pyramid. It's going to get a lot worse.

[metroins]

Would be nice to see these fast food places die and healthy options become normal.