Pizza Hut Layoffs

Pizza Hut is set to lay off more than 1,200 delivery drivers in Los Angeles, Orange and Riverside counties in the coming year, ahead of a new state law that boosts the fast-food minimum wage by $4 to $20 per hour.

The law, known as Assembly Bill 1228, was introduced by Assemblyman Chris Holden, D-Pasadena, and signed into law in September by Gov. Gavin Newsom.

Pizza Hut franchises are preparing to pivot toward third-party apps like DoorDash, GrubHub and UberEats for pizza and food deliveries.

A second Pizza Hut franchise, Southern California Pizza Co., is also planning to lay off 841 drivers. The layoffs will impact drivers in Pizza Hut locations in Sacramento, Palm Springs, Los Angeles, Central California, Southern Oregon, the Reno-Tahoe area, among others.

Yum! Brands, which owns Pizza Hut and other fast food companies such as Taco Bell and KFC, did not immediately respond to a request for comment.

Yum! Brands previously told Business Insider that "its 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 carry out and delivery."

Following the passing of the law, a statement from Holden expressed that the increase in pay will have a positive impact on workers' ability to provide for their families, afford transportation, and enhance their overall quality of life.

In addition to raising the minimum wage for fast food workers to $20 an hour, the law also establishes a Fast Food Council. This council aims to address concerns of employers and ensure the well-being of fast food workers by giving them a seat at the table to raise standards, according to Holden's office.

The council will consist of nine voting members, including representatives from the fast food industry, franchisees, employees, advocates, one unaffiliated member of the public, and two non-voting members who will work with state authorities to safeguard the health, safety, and employment of fast food workers.

The responsibilities of the council will also involve the development of standards for fast food workers, covering areas such as wages, working conditions, and training.

The passing of AB 1228 will have an impact on over 550,000 fast food workers and approximately 30,000 restaurants in the state.