Sysco furloughs and lays off more employees
Food service distributor’s business has been affected as its customers see reduced traffic
Sysco has furloughed and laid off more workers — including employees at its corporate office in Houston — in response to the economic fallout from the novel coronavirus pandemic.
The Houston company, the nation’s largest food service distributor with more than 69,000 employees globally, did not disclose the number of additional employees who were furloughed and laid off.
“Social distancing measures implemented in response to the COVID-19 pandemic have caused many of Sysco’s customers to either temporarily close or experience significantly decreased consumer traffic, and thus Sysco’s business has also been impacted significantly,” Sysco spokeswoman Shannon Mutschler said in an email. “As a result, we have made
the very difficult decision to reduce the size of our workforce, including a mix of permanent terminations and temporary/furlough actions that affect associates in our corporate office in Houston.”
Sysco, which provides food to restaurants, schools, hospitals, hotels and office cafeterias, last month said the pandemic has caused a “dramatic reduction” in
its business as customers followed stay-at-home orders across the country to slow the spread of the virus. Schools and offices have been closed for more than a month, and restaurants still operating takeout services have seen a steep drop in customer traffic.
As a result, the company on March 27 said it furloughed and laid off an undisclosed number of sales, warehouse, transportation and support employees worldwide. At the time, Sysco said it would continue to pay benefits to its nonunion employees who
were furloughed. The company also entered into a partnership with Cincinnati-based Kroger, the nation’s largest grocery chain, to offer temporary work for furloughed Sysco workers at some Kroger distribution centers.
Sysco last month also reduced hours for some of its employees, cut capital investment to noncritical projects and began pivoting its business to new markets, such as retail grocery. The company, which said it is not seeking a government bailout, has opened some of its warehouses to retail
customers shopping for food during the pandemic.
This month’s layoffs are the latest to hit Sysco employees in recent years.
The company a few years ago outsourced information technology work to India, and last year laid off nearly 300 finance and accounting staff at its shared services center in Cypress.
In addition, Sysco consolidated its French and hospitality subsidiaries and closed some facilities in Canada and Europe, laying off an undisclosed number of workers.
Earlier this year, Sysco outsourced all of its U.S. customer service functions, laying off at least 30 employees in the Houston area and others nationally. The food distributor partnered with Cognizant, a New Jersey outsourcing firm, to manage its customer service as part of a new “centralized customer care model” that would allow for extended hours and a single point of contact for its customers.