In anticipation of the upcoming hike in the state minimum wage, Californian companies are preparing for the impact by reducing staff hours and laying off employees. According to state records, a number of restaurants—particularly pizza joints—have come up with plans to fire hundreds of employees. Furthermore, some operators have chosen to completely stop hiring or to cut back on the hours that current employees work. These behaviors are a reflection of the difficulties companies encounter in adapting to labor cost fluctuations, forcing them to make tough choices in order to sustain profitability in a changing economic environment.


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