Wendy’s to Lay Off All Cashiers, Autonomize 6,000+ Locations to Fight Wage Increases

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The fight for $15 per hour. The unintended consequences of raising the minimum wage are already beginning to take hold on several industries nationwide. In one of the most public moves combating wage increases to date, Wendy’s fast food chain has announced plans to automatize cashiers at over 6,000 facilities nationwide by the end of 2016.

Though Wendy’s made their decision official this past Thursday, Company CEO Emil Brolick hinted last August that the franchise might do just this. At the time Wendy’s was debating laying off employees in favor autonomization, or increasing the prices on their menu. As Emil Brolick stated “our franchisees will likely look at the opportunity to reduce overall staff, look at the opportunity to certainly reduce hours and any other cost reduction opportunities, not just price. You know there are some people out there who naively say that these wages can simply be passed along in terms of price increases. I don’t think that the average franchisee believes that.

Wendy’s CFO Todd Penegor went on to add “We continue to look at initiatives and how we work to offset any impacts of future wage inflation through technology initiatives, whether that’s customer self-order kiosks, whether that’s automating more in the back of the house in the restaurant. You’ll see a lot more coming on that front later this year from us.

Indeed they will. In an interview with Business Daily, Wendy’s representatives noted how the company’s 258 restaurants in California were struggling to keep up with the $10/hr wage demands, and similarly, the company’s 200+ franchises in New York simply cant keep up with the cost of wage inflation. Last month these two states voted to impose a minimum wage increase to 15$ statewide – going into effect within the next several years.

This legislation, along with the growing support for “the fight for $15$” nationwide, was the deciding factor. Wendy’s will now faze out cashiers at every location nationwide, in favor of self serve kiosks. The company also claims they will move forward with mobile phone ordering and mobile payment systems, which the company has been testing for the last several years.

Before you go ahead and call Wendy’s just another evil corporation, here are some real world statistics to consider – imagine you were the owners of Wendy’s. Wendy’s makes a profit of $120 million dollars per year and employs 37,000 employees. This means if each employee worked 2,000 hours per year (38 hours a week), with a 1.62$ increase for each employee, the company would loose all $120 million in profits and break even. Again, this is with a small wage increase of 1.62$, never mind all the way up to 15$. At 15$/hr the company would bankrupt themselves. This is the problem of raising a minimum wage and a perfect example of the harm wage increases can cause to the work force, corporations and the economy all at the same time.

Sources: Business Daily, Breitbart, The Libertarian Republic


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53 COMMENTS

  1. Autonomize IS NOT A WORD. The word you want throughout this article is AUTOMATE. Sheesh. Why should anyone trust your stuff when you don’t even take the time to use correct language, the basis of all communication?

    • I had more of a problem with ‘faze’ for ‘phase’ and ‘loose’ for ‘lose’ but the sentiment is the same. Also, there is no “owner” of “Wendy’s” in the sense that someone owns all the Wendy’s restaurants in the world. Wendy’s corporation sells franchise rights to individuals / companies, actually running only about 1000 of the individual restaurants directly. Therefore “Wendy’s” cannot make the decision on their own to “fire” employees; that is up to the individual restaurant’s owner. So, let’s look at one main owner, Davco, who has 150 restaurants and 5880 employees. Davco is fighting Wendy’s corporate because they are mandating all franchises update their point of sale system. Davco said it was not financially wise (btw, the franchisor Wendy’s put out that mandate in 2012, well before the ‘fight for $15’). Turns out Davco was probably smart for fighting against the new tech since many Wendy’s customers have sued due to hackers getting into the Aloha POS system and cleaning out their bank accounts.
      Wendy’s corporation bottom line profit was $167 million last year, not $120. And, this is after closing several of their restaurants.
      Anyway, back to the 37,000 employees. The author of this article also failed to calculate how much raising the wages of these employees would cost, because she just assumed they were full time employees, and that they were all minimum wage employees; the total number of employees includes part-time as well as administrative (salaried) personnel. Virtually NO fast food or dollar store employee is full time. Only managers and assistant managers get full time; everyone else gets 10-20 hours of work per week. (Think about it this way: Davco has 152 restaurants and 5880 employees which would be 38 employees per restaurant. NO Wendy’s has 38 employees!) Also, some restaurants hire the disadvantaged / disabled and are able to pay much less than minimum wage for them through government programs. So, essentially, it is very difficult to determine with any data I’ve found how much raising the minimum would actually cost. But, let’s do it this way: the statistics I’ve seen says 16 per restaurant. Take away the owner, manager and assistant manager who are salary. So, about 13 hourly employees per restaurant. (This is not unreasonable. Dollar stores typically have payrolls of 10 employees, with hours budgeted of 130-140 per week. The stores are open 98 hours a week, so that means the manager budgets 1.3 employee hours for each hour opened. Even though a Wendy’s may have 13 hourly employees, that does not mean the store has a budget to give those 13 employees full time hours. More than likely, they have a budget of 714 hours a week or less.
      So, let’s go with 700 hours a week. To raise those hours to $15 would take $5250 per week, or $750 a day. On average, 1,733,333 customers visit a Wendy’s restaurant in a day. There were approximately 6500 restaurants (both corporate owned and franchised). That means each restaurant had, on average, 266 customers per restaurant per day (actually more since a “customer” may be one person, or a family of five in a single transaction.) That means, it would take raising the price of food, per customer, to an extra $2.80. Basically raise the price of a burger by .50 cents and fries .25, soda .25 and your restaurant has paid for giving your employees a living wage. And guess what? Now your employees and their families may actually be able to eat in your restaurant. And they will no longer need food stamps to survive, which means less taxes for me.
      So, when a corporate owner tells me they can’t afford to pay their employees a living wage, and would rather spend MILLIONS installing faulty tech that ended up getting them sued, yes, I do call them evil. If you can’t afford to pay your employees a living wage, and would rather have me and other taxpayers subsidize your company via food stamps and other welfare, then you obviously aren’t a successful business person.

      • Thank you! I am so tired of hearing wealthy business owners complaining about having to pay their employees a decent living wage, which was supposed to be guaranteed by minimum wage law anyway. It is unimportant to me that owners will have their profits cut into, because without the employees doing ALL of the work, there would be no profits anyway. Minimum wage was created to ensure that people were paid “the wages of a decent living.” If business can’t do that, they should not be in business.

        • Not everyone deserves 15$/hr. Some people don’t have the skills, attention span, drive or work ethic to deserve it. You think every cashier in the world actually “deserves” 15$/hr?

          And glenn and lisa, honestly, if it is so easy and so lucrative to be running a business. All these evil wealthy people mooching of the back of society, then why aren’t you two running your own businesses then? Why aren’t all the people complaining for more money while simultaneously complaining businesses owners are too rich running businesses? Your arguments are just a fallacy, you people are just taking a victims mentality for the sake of feeling like a victim – removing yourselves from taking any responsibility for your own lives. ‘Its not my fault I am not happy, dont make more money, dont have a better job. It is all these other peoples fault!’

          I hire people for 15$/hr because I want them to work hard. I also end up firing 90% because they don’t deserve the money. Ive caught people repeatedly talking on theirs cell phones with friends as soon as i leave. I have checked in on workers and found them literally dry humping and making out with their boyfriends while on the clock, someone once told me they worked for 6 hours while I was gone, when i checked the work they did something i could have done in 20 min. I could go on and on. I agree to have a good work force you need to pay them well, but you cant blindly pay everyone just for the sake of paying them. They have to actually earn it.

          There are other ways to increase quality of life, for example lowering the tax rates. I am a believer in the notion that if you lower taxes then you do not need to raise the minimum wage. Lowering taxes literally gives people money back on every pay check which in essence acts just like a pay raise. For example if you combine personal income tax and sales tax, California and New York are two of the top 4 highest taxed stated in the country: https://turbotax.intuit.com/tax-tools/tax-tips/Taxes-101/States-with-the-Highest-and-Lowest-Taxes/INF23232.html

          By almost any other metric you look at, New York state has the highest taxes in the USA. Depending on what source you read California comes in 2nd place or 6th place for the highest taxes in the USA: http://www.marketwatch.com/story/10-states-with-the-highest-taxes-2016-01-22 or http://www.cheatsheet.com/business/top-10-states-with-the-highest-taxes.html/?a=viewall

          So I argue it is not for no reason these two states in particular have to raise their wages, they rob the citizens blind through taxes. If they cut taxes they would not need to make all these new wage laws.

          Rather then have government make new laws, placing more demands and making everyone pay more money like California and NY just did, I prefer smaller government. Smaller government = less laws, less taxes, less government intrusion, more freedom for the individual person and businesses alike. Just two different approaches towards the same goals, getting people more money.

          • I would like to see these rich people work for 8.10 and pay all your bills its not going to happen.I live in Ohio and that’s all min wage is its not enough I am not saying where I work but I do work in a Restaurant and I am a cashier and that’s all I make I work 38 to 40 hours a week and I cant make it on that I think if I made 300 a week I could do it.

          • “You think every cashier in the world actually “deserves” 15$/hr?” Yes, actually, I do. It’s barely a living wage.
            Let me ask you a question – do you think that workers should work for so little that they can’t afford food and shelter? Even slaves were given food and shelter.
            If your economy can’t survive without requiring workers to go hungry then your economy is based on false premises and you should find some other way to make money.
            Workers are done with being exploited and if you can’t see the pitchforks, you had better get yourself some glasses.

          • Bren says she works 38-40 hours a week and only makes $8.10 an hour which is not enough to make it. But if she made $300/week, she could do it.

            Um, $8.10/hr for 40 hours a week is $324.

            And she’s a cashier. This is why not everyone deserves $10 or $15 an hours, if you see what I mean.

        • > Thank you! I am so tired of hearing wealthy business owners complaining about having to pay their employees a decent living wage,

          You are in luck, Glen. Starting later this year, Wendy’s executives will no longer be complaining about paying cashiers a higher wage.

          Mission Accomplished!

        • The business entity should have the RIGHT to pay whatever rate they deem necessary. The employee has the right to accept or not. If you are concerned about wage rates, donate to those that fetch your order.

        • The major thing here is along with the direct employees, all the others in line from the farms to warehouses to loaders Etc Etc Etc will also be getting this increase. The average skilled worker inmost given fields gets around 4 – 5 times the minimum wage. They will have to go up to around #60 – 75 an hour too! That means the building will cost 4 times as much to build. The grills and equipment will cost 4 times as much. The cost of meat, vegetables and buns will also increase the same Same for the truck drivers. You only seem to count on the direct employees getting this raise while everyone else in the country is supposed to stay the same?
          Raising the minimum wage to $15 an hour only makes $20 an hour the new $9.00
          As the owner of a small machine shop who pays relatively experienced help around $24 an hour,Not considered a high wage in this trade(and with a min amount of overtime they earn more than I do) If this goes thru my employees will consider the $24 just over min wage
          Wendy’s was never designed to be a life’s work for an adult. You are perfectly welcome to look at what your job will be paying 10 years down the line and get trained accordingly or find a better paying trade to learn!
          All of this comes from people who haven’t put their whole lives on the line trying to start one of these up. You need to come up with about a quarter million cash and then you STILL have a mortgage!

        • Here is the one thing all of you “Fightfor$15” losers never ever think of. Automation will continue to decrease the number of entry level jobs out there. if you make it more expensive to hire someone, you make the cost of labor closer to the cost of Automation, which means you only SPEED UP job replacement with Automation!. I used to think the Libtards were just missing the basics of Econ 101 when they are screaming about doubling the wage, but I now understand it is because they WANT more people unemployed and on the Govt. Teat. they WANT more people to depend on the Govt. and as they play these games thinking they are achieving their idealistic but unrealistic goal, they are pushing this country toward a total collapse. 20T in debt, and another 200T in unfunded liabilities, when this collapse happens it will make the great depression look like going on vacation.

      • Which proves the point that there’s never money in the “fair compensation for employees” budget, but plenty in the “find ways to get rid of employees” fund.
        It’s not just the food service industry that this is happening in. I’ve seen it in hundreds of different business models. They will spend millions upon millions buying and installing often unproven and untested automation systems, fight with them and the manufacturers for months or even years to iron out the bugs, meanwhile spending countless millions more, but whine and cry about how labor costs are killing them as they lay off employees that the faulty automation systems are supposed to replace.
        And let’s get the terminology straight……..these people aren’t being laid off, they’re being fired…let go permanently.

        • You missing a HUGE point….you can write off the depreciation of machines and not worry about the additional workers unemployment, workers compensation taxes in addition to matching Social Security taxes the employer makes that the employee never sees which is based on the amount an employee makes (not flat rate).

          • The “BIG” point that they are not seeing is with this, EVERYBODY’S wages need to up. From the Real estate agent that sells the land to construction workers that build the building to the people that make the grills and equipment to the farmers to the warehouse workers to the truck drivers etc. etc. etc.
            When $15 is the minimum wage then $20 an hour will be the new $9.00
            It is called “MINIMUM” wage because it is “supposed” to be the bottom!
            These same people consider a 60 mph speed limit the minimum speed

  2. These changes have been in the works for longer than the call for $15. Most of the fast food places are hurting for various reasons not related directly from wages. It would happen anyway. Do they have a macine to dispense the food??!! I seldom eat there, so it won’t be a problem boycotting.

    • Most fast food resturants are franchises, not company owned stores. Their profits are far less than the corporate accounting shows, and they are under the thumb of corporate mandates and policies. The franchises aren’t getting rich by any means

  3. How is it that paying an employee, that you took the time to train and primp for a position that presents an image for your company is not in your best interest? $15.00 an hour makes employees more focused and less inclined to spit in burgers and waste the food products. $15.00 and hour would be a nice help to senior citizens who need a part time job to supplement their social security. College is expensive nowadays, why do you think you can put the grift on the college kids?

    Computers require updates, and maintenance, and the last time I checked, a computer tech earns a hell-a-lot more than than a $100K per year. Computers have to be replaced after a few years. Software is sometimes updated in a few days… How is the computer going to make change or take orders if the power goes out? (It happens.) How will a computer replace the cashier? (If the chain was called Hooters instead of Wendy’s do you think the customers would come in to place their orders with a computer?)

    I think that if Wendy’s can’t afford to pay their employees, they should consider closing their doors. A business who cannot pay the basics to keep the doors open (Rent, employees, and supplies.) is a failed business. It’s the cold nature of Capitalism. The moment Wendy’s closes another burger chain will fill the void as if Wendy’s had never existed.

    • I worked for over 20 years in the food service industry, and I can tell you, for sure, that employee morale is the most important aspect of a successful restaurant. With a decent wage, employees WILL take more pride in their work, be less stressed, and overall, be more productive.

      • > ith a decent wage, employees WILL take more pride in their work, be less stressed, and overall, be more productive.

        But, will the cost be worth it? If an employee’s salary is raised from $8 to $15, will the employer get double the work from the employee?

  4. who didn’t see this coming lol soon fast food restaurants are going to resort to having machine do basically everything so they don’t have to hire as many people.

  5. Then it’s BYE BYE, WENDY’S.

    I WILL NOT sell myself their food. Not a chance. It’s bad enough I have to bus my own table, or spend my gas whilst waiting in a drive-up.

    A DI OS.

  6. Another thought.

    I can’t wait to go in there, ask for managment, and tell them:

    “Take a message. That, if this is true, I won’t buy today and I won’t buy when the change takes place.”

    A DI OS.

  7. And how much does the CEO and CFO make? Would they follow the model of CostCo’s CEO, who make less than $500,000 a year (rather than millions), they could afford the raise and still show healthy profits.

  8. The World Needs BASIC INCOME for ALL!!!

    Unless we take Drastic measures to Halt Technology, it’s Natural for it to Keep Advancing. No one can realistically argue with that Fact.

    So “jobs” will Always be Lost to Machines, Robots, and Automation, period!! And Again, Unless we Purposely Halt or Stall Technology’s Natural Move Forwards, those “jobs” are NEVER coming back.

    For Example, It’s All Around you. People are being replaced by Machines on Assembly lines; self-checkout and payment in supermarkets; automated customer service on the telephone; Self-Service counters in fast food restaurants, airports, banks, etc…; Self-driving cars are being built; a Hotel in Japan is Soon to Open and will be Totally Staffed by Robots; even Some Surgeries are Now performed by Robots/Machines; etc…

    We Must Reevaluate how we “earn money,” And Most Importantly Eventually WAKING UP and Finally Realizing that “money” is Really NOT Needed!

    In Fact, it Enslaves Humanity.

    TRUE STORY!!

    All You Need to do is Finally WAKE UP from Your Capitalism-Induced Comas. 😉

    VOTE BERNIE SANDERS and LONG LIVE THE REVOLUTION OF CONSCIOUSNESS!!!

    #StillSanders #FeelTheBern #NotMeUs #BernieOrBust #ImWithTulsi #FightFor15 #BasicIncome #TheZeitgeistMovement #TheVenusProject #ResourceBasedEconomy #TZM #TVP #RBE

    http://youtu.be/7Pq-S557XQU

    http://youtu.be/aIL_Y9g7Tg0

    http://youtu.be/7Pq-S557XQU

    http://youtu.be/4Z9WVZddH9w

    http://youtu.be/EewGMBOB4Gg

    http://youtu.be/KphWsnhZ4Ag

  9. Another way to think about this is a shift of customer service jobs to more jobs in the tech industry providing the support, service, design, sales, and infrastructure supporting this automation technology. People may perceive this as just a machine that sits in the restaurant but there is a ton of backend technology and infrastructure needed to make it work. Many of those jobs will be filled here in the US and pay much more than $15 per hour. Blindly fighting for Mc Jobs will not raise the standard of living in America nor it’s ranking in the global economy. Evolve or die.

  10. This guy can’t spell. Also it’s not the corporation loosing any of the 120m. It would come from the franchise’s. They can EASILY afford it in high traffic areas. If they can’t afford employees at livable wages, maybe they aren’t running the business correctly?

    • Neil I can’t spell well either but I did have a 4.0 in Grad school at DePaul University (multiple deans lists / honor societies). Everyone has faults but the faults of those who so easily criticize others are the worst of all.

  11. I guess my days of eating at Wendy’s are over amazing how some will cut off their own noses. Their loss not mine!

  12. Sorry to those who want to boycott industries that are replacing workers with self-service automation devices. Technology is involving to a point repetive work by low skilled workers is not needed and not cost effective.To be against that is to deny the inevitable.

  13. All these people saying they will boycott Wendy’s now… I completely and whole heartedly do not care who or what makes the food for me. Most likely, there will be fewer mistakes too, if I ask for more cheese or no onions it will actually happen. I worked for Wendy’s as a high school student and decided to get a skill outside of food services. Now I work as a Developer in the computer field so this change is right up my alley. What makes you think that Wendy’s will be the only fast food chain to do this? Wendy’s is just beat the others to the punch.

    On the opposite front, I believe that minimum wage is an awful way to enforce a raise. People who deserve more should get more based on their hard work. People who have shown to be proud, helpful, motivated employees should be receiving more then $15/hour while others should be well below $15/hour.

    I believe that there should be a wage minimum in the eyes of the employer. That is to say, once an employee has reached this minimum they should be let go. Something around $5/hour at which point it makes no sense for the employer to hire them or the employee to stick around. This “could” influence better manners and motivation in their next job.

    I mean, who does not want to be paid well?

  14. Want to cut down on your costs? Cut down on the crazy salaries at the top. But of course the workers at the bottom are always easier to blame. Shame on them for wanting to earn a decent living!

  15. Best thing my wife and I have done is stop eating out. We save a ton of money, we have lost weight, the noney we have saved we use to pay for our gym membership. We eat better making it ourselves, we spend time in conversation around a table. When we do eat out, it is to our local restaurant that supports the local community.

    This my friend is how captialim works

  16. The last time I checked, Wendy’s and the other employers who hire minimum wage employees do not conscript or hold a gun to people’s heads to make them work there. If the wage a company is offering for your services is too little to live on, don’t take the job. If you want to earn more than minimum wage, have more than minimum skills. Finish school, learn a skill, make yourself more employable. When you have skills, you can negotiate better pay. A job as a cashier was never meant to be a career. It is a part time job.

  17. I don’t eat there so there’s nothing to boycott, but I wouldn’t bother anyway.

    It is up to the employees to fight their own battle by unionizing, not the general public to pitch a hissy fit on their behalf (much less a minimum wage adjustment which does not work as people under forty in this county seems to think it does). I have the same stance on Wal-Mart here, which appears to be more abusive of workers than any fast food franchise: I empathize, but just like every union that ever formed they will have to stand up for themselves first. Nothing else gets them what they really want.

  18. Good I don’t eat there and hopefully they will go out of business in a couple of years. Fast food is killing Americans and there are platforms that have jobs for different skill levels that pay better. Many restaurants today use an automated ordering system, however the food still needs delivery. In short cashiers who take the order and deliver the food will only have to deliver the food for $15 an hour. They don’t have an automated drive through in many cases the drive through person takes the order, packs the food, works the register and hands it to the driver. Once again another CEO with a stupid knee jerk reaction to a changing and evolving world. It’s clear that $15 per hour isn’t what will break Wendy’s it’s poor leadership.

  19. It’s so sad the number of people that defend this $15/hr minimum wage. When did a job meant for teenagers, just starting into the workforce, become a career path that is suppose to support a family? How about you get off your asses and work hard to better your position and quit believing that your are ENTITLED to anything at all! I’m sure each of you are griping about your overwhelming poverty while reading this on your new iPhone 6+..

  20. They are not “unintended consequences”.
    They are deliberate decisions. Enough businesses reinvest in paying higher costs, raising customer value and raising price. There are a range of strategies for responding to minimum wage increases. If the rich don’t cut out this shit, we’ll stop campaigning for minimum wage and start campaigning for maximum wage and minimum tax avoidance.
    Then we’ll just watch a whole new set of “unintended consequences” roll back.

  21. Here is what will happen to Wendy’s customers…they will vote with their feet and move away from the counter when the price increases begin….and price increases will begin quickly! Read below what happened to the “no-tipping” restaurants of a few months ago:

    The movement to eliminate tipping in American restaurants may be showing its first signs of wear. On Monday, Gabe Stulman, a New York City restaurateur who joined the growing no-gratuities campaign in December, announced that he would be reinstating the gratuity system at Fedora, his clamorous West Village haunt. Fedora was Stulman’s first venue to test out a service-included model, which required higher menu prices.

    While it is not the same it IS related! Prices will mean less customers. Less customers will mean less jobs.
    Period.

    Ray

  22. Go ahead Wendys and do that…. one way or the other you will be out of business… boycotts work and no one HAS to eat your food there are plenty of other places to go and have better food than you serve, so good luck with investing all that money into automation right before you go bankrupt.

  23. The average billionaire makes $1,000,000 an hour. So, you want us to believe that raising the minimum wage from the starvation-only wage it is now, to the barely survivable level of $15 an hour is a PROBLEM? What exactly would the consequences of lowering the MAXIMUM salaries? There’d be so much more money in the economy (of the US and world) we could easily afford not just a universal-US minimum of $15 (and rising to at least match inflation every single year); but such a level could be the WORLD-WIDE standard. In other words, blaming the poorest workers for their own poverty (either super-low wages and/or losing their jobs), despite working some of the toughest jobs – is the exact-opposite-of-the-truth CRAP, promoted amongst us by the Super-Rich.

  24. Something all of you guys are leaving out…if the minimum wage is raised, it’s not just multinational corporate fast food restaurants that will have to pay $15 an hour…it will also require the small mom and pop restaurants that are barely scraping by as it is to do so as well. And I promise you they are not making anywhere near enough money to support $15/hr for every employee. A lot of small restaurants and businesses will close because of the raise. If they don’t close, they will just reduce the number of employees they have making the remaining employees do the work of 2-3 ppl each or more. This will just cause more unemployment. I promise you employers will just let go of employees they can’t afford anymore before they go out of business. So instead of making the $7-9 an hour like you have been, now you’re just unemployed making $0/hr let alone make $15/hr.

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