California Pizza Huts lay off all delivery drivers ahead of minimum wage increase

Pizza Hut is laying off more than 1,200 delivery drivers in California.

The layoffs, which will take place through the end of February, come as California's minimum wage is about to go up by $4. Fast-food workers in the state are set to get a pay bump of close to 30% in April as the minimum wages rises from $16 to $20 an hour.

PacPizza, LLC, operating as Pizza Hut, said in a Worker Adjustment and Retraining Notification (WARN) Act notice that the company made a business decision to eliminate first-party delivery services and, as a result, the elimination of all delivery driver positions, according to Business Insider. The notice was filed with the state's Employment Development Department.

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

Southern California Pizza Co., a second Pizza Hut franchise, is also eliminating its in-house delivery services and laying off 841 drivers, according to a WARN Act notice from Dec 1.

The layoffs impact drivers at Pizza Hut locations in Sacramento, Palm Springs, Los Angeles and other cities throughout the state.

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robertsnj · 56-60, M

they would have laid them off without the minimum raise hike. Org's like pizza hut are realizing they can essentially 1099 grubhubs and and other 3rd party delivery drivers to be their contractors.

the interesting thing is that Pizza hut is owned by Yum brands that has a division that makes broad business plans for their restaurants. They, ran a projection on the amount of labor that existed for 3rd party delivery drivers / contrasted that with their internal delivery staff and made a caluculated bet. It was interesting California was the test state. New Jersey, where I live or NY would have been smarter. Pizza hut has such a hard time fighting for market share in my part of the country due to mom and pops.

It is a big gamble. I am not sure who many pizza chains and other organizations compete for 3rd party delivery drivers in Cali or how many independant drivers there are. That is an unstable supply market as of today (supply of drivers).

I do understand using Cali as a cover to advert a what they percieve as a poetential PR distaster from layoffs. However I don't really think anyone cares about fast food layoffs. It is non skilled labor and traditioanally one of the dangers of non skilled labor is lack of job stability.

On a sidnote the bartending industry has been an early adapter at contingent labor a while back. If you bar hop (I don't ) in major metros chances are a large percentage of your bartenders are contractors who picked up a shift and are not actually employeed at that bar.