Unfortunately for you, CA is an at-will employment state. The employer can fire you for any reason or no reason, just not an illegal reason. Hiring friends may sometimes be a stupid reason, but it is not illegal.
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The employer can fire you for any reason or no reason, just not an illegal reason. You need a lawyer. Check with a lawyer in your locale to discuss more of the details.
Good luck to you.
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It sounds like your new boss has made some financially stupid decisions so that he could hire his friends, but unfortunately it's perfectly legal to a boss to hire their friends and relatives, and if you had no union or written contract and were "at will," the boss can fire you without notice and without reason.
Such is the pro-business capitalistic society we live in, unlike, say France, where the workers have real rights.
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