In response to California's forthcoming minimum wage increase, two major Pizza Hut franchisees in Southern California are reportedly planning mass layoffs that would affect 1,200 workers. Additionally, delivery services in several locations are expected to be eliminated, impacting another 800 employees. The wage legislation, known as AB 1228, which was signed into law by Governor Gavin Newsom, will gradually raise the minimum wage to $20 per hour for fast-food workers by 2024.

The decision by Pizza Hut franchisees to downsize their workforce and end delivery services is said to be a direct response to the rising labor costs associated with the minimum wage hike. These changes will affect Pizza Hut locations in Orange, Los Angeles, Riverside, San Bernardino, and Ventura counties, as well as Sacramento, Central California, Southern Oregon, and the Reno-Tahoe area.

Customers in the affected areas will need to rely on alternative food delivery services such as Uber Eats and DoorDash, as Pizza Hut franchisees have decided to no longer offer delivery options. However, the company assures customers that access to delivery will still be available through the Pizza Hut mobile app, website, and phone ordering.

The wage increase has prompted concerns among various fast-food companies. Although Pizza Hut has publicly acknowledged the changes, other chains such as KFC and Taco Bell have not yet responded to inquiries from ABC News.

The new legislation, set to take effect in April, will see fast-food workers' minimum wage increase to $20 per hour in California, a $4 increase from the current state minimum wage of $16. Both McDonald's and Chipotle have previously expressed concerns over the impact of the wage increase on operating costs, potentially leading to changes in menu pricing.

While the franchisees' decision to downsize and cut back delivery services has not been officially confirmed, Pizza Hut's parent company, Yum! Brands, stated that its franchisees independently operate their restaurants and comply with all relevant regulations while striving to deliver quality service and food to their customers.

As the minimum wage increase looms, the fast-food industry is facing significant challenges in balancing labor costs with maintaining profitability. The full extent of the impact on workers, businesses, and customers remains to be seen, and the changes are likely to continue sparking debates regarding the economic implications of increasing the minimum wage.