Over 1,000 delivery drivers for Pizza Hut in California were notified that their positions are being eliminated, according to documents provided by the state of California.
The notices were sent out by four franchisees who said they would complete the layoffs in February.
The layoffs were announced as the state of California plans to raise the minimum wage for fast food workers to $20 an hour in April. The current minimum wage in California for workers in fast food and other industries is $15.50 an hour.
In October, lawmakers approved the $20 minimum wage. After legislators originally approved a $22 minimum wage, a ballot initiative was underway to block the $22 minimum wage from going into effect.
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Yum Brands, the parent company of Pizza Hut, was among several companies objecting to the $22 minimum wage proposal. According to state data, Yum Brands spent nearly $1.6 million opposing the $22 minimum wage.
In-N-Out, Chipotle, McDonald's and Chick-fil-A each spent over $11 million to oppose the $22 minimum wage law.
Now that it appears settled that fast food workers will earn a minimum of $20 an hour, chains must decide how much of the cost to pass along to customers.
Several major chains have said prices will likely go up when the wage hike takes effect.
It's unclear what effect the new law will have on Pizza Hut's bottom line. As of the end of October, Pizza Hut posted a $292 million net profit for 2023. Pizza Hut posted a $387 million net profit in 2022. The company has opened more than 400 new locations so far in 2023, according to its investor filing.
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