California Pizza Huts Slash 1,200 Jobs as in-House Delivery Ends

Two California Pizza Hut locations are eliminating in-house delivery, resulting in 1,200-plus driver layoffs.

The job cuts impact Pizza Hut delivery drivers across California, including at Sacramento, Palm Springs and Los Angeles locations, Business Insider reported Tuesday (Dec. 26), citing federal employment notices.

The franchisees are eliminating staff as fast-food chains around California prepare for a new law that raises worker pay to $20 an hour in April, the report said.

One driver — a nine-year veteran of the company — said he was offered $400 severance pay if he stayed on the job through his Feb. 5 layoff date, per the report.

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

Customers will have to rely on third-party delivery providers such as DoorDash, Uber Eats and Grubhub, all of which work with most of California’s Pizza Huts, the report said.

California’s new minimum wage for fast-food workers emerged as part of a compromise between fast-food companies and labor unions, with fast-food companies agreeing to remove a 2024 ballot referendum that would have repealed a law focused on improving wages and working conditions.

In return, labor unions backed off from their push to hold fast-food corporations liable for violations committed by their franchisees. The new $20 per hour wage is an increase from the median wage for fast-food workers in the United States, which was $13.43 an hour in 2022.

Meanwhile, PYMNTS reported in August that Pizza Hut argued it maintains an edge in the third-party delivery space amid increased competition from Domino’s.

“Going forward, we think we have some differentiating capabilities that will help us sustain our competitive advantage in pizza with the aggregators,” Chris Turner, chief financial officer of Yum Brands, which owns Pizza Hut, said on an earnings call at the time. “One of those is Dragontail, which helps to optimize the delivery operations in our restaurants, including our interface with the aggregators. Plus, we’ve got some first-mover advantages around marketing expertise and talent in that space that we think will help us continue to drive that business going forward.”