Calif: Food Chains Lay Off Workers, Begin To Raise Prices Before Minimum Wage Hike In April

By Brooke Mallory

 

In anticipation of a new $20 minimum wage law that will have a significant negative impact on food brands’ bottom lines when it goes into effect in April, a slew of fast-food restaurants in California are now beginning to fire employees and raise prices.

According to The Wall Street Journal, fast food restaurants, particularly pizza chains, and even higher-end food establishments have started to reduce staff in an effort to prepare for potential financial consequences.

Pizza Hut driver Michael Ojeda, 29, of Ontario, California, told the press that he was notified in December by Pizza Hut franchisee Southern California Pizza that his last day of employment would be at the end of February.

“Pizza Hut was my career for nearly a decade, and with little to no notice, it was taken away,” Ojeda said.

A handful of California-based Pizza Hut locations also announced last year that they were ending their delivery services in order to comply with the Worker Adjustment and Retraining Notification Act.

Southern California Pizza Co. said in December that it was laying off about 841 drivers statewide. Pizza Hut outlets in Los Angeles, Orange, San Bernardino, Riverside, and Ventura counties will be impacted most by the changes, sources say.

“Where select California franchisees have elected to make changes to their staffing approach, access to delivery service will continue to be available via Pizza Hut’s mobile app, website, and phone ordering, and the customer ordering experience will remain consistent,” a Pizza Hut spokesperson told the press.

According to a Journal article, Menlo Park, California-based Round Table Pizza said that it will be firing at least 73 delivery drivers this year as well. Excalibur Pizza LLC similarly stated that the majority of the workers being let go from its business are also delivery drivers.

“The franchisee is transferring their delivery services to a third party. While it is unfortunate, we look at this as a transfer of jobs,” the statement said. “As you know, many California restaurant operators are following the same approach due to rising operating costs. We anticipate third-party delivery providers in turn will see a boost in their businesses, which will require additional staff on their end.”

Fat Brands Inc., another large company that owns restaurants like Johnny Rockets, Hot Dog On A Stick, Fatburger, and Round Table Pizza, stated that the change may result in much higher delivery costs and higher prices for customers in general.

Brian Hom, who owns two Vitality Bowls restaurants in San Jose, California, said that he staffs his establishments with just two people rather than the customary four. Customers will now have to wait longer for service due to a staffing shortfall, and prices will rise to offset the higher labor expenses…

READ FULL ARTICLE HERE… (oann.com)

 

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