Houston-based Sysco lays off, furloughs workers in response to coronavirus fallout
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Paul Takahashi March 30, 2020 Updated: March 30, 2020 9:52 a.m.
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Lift operators navagate the facility on hydrogen-powered fork lifts at the new 630,000 square foot Sysco distribution center serving Central Texas in Schertz, Texas, Thursday, February 23, 2012. ( Photo by J. Michael Short / SPECIAL )
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74Lift operators navagate the facility on hydrogen-powered fork lifts at the new 630,000 square foot Sysco distribution center serving Central Texas in Schertz, Texas, Thursday, February 23, 2012. ( Photo by J. Michael Short / SPECIAL )Photo: J. Michael Short, Freelancer / Special to the Express-News
Warehouse at Sysco Houston at 10710 Greens Crossing Blvd., Monday, June 25, 2018, in Houston. ( Karen Warren / Houston Chronicle )
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74Warehouse at Sysco Houston at 10710 Greens Crossing Blvd., Monday, June 25, 2018, in Houston. ( Karen Warren / Houston Chronicle )Photo: Karen Warren, Staff / Houston Chronicle
An employee of the San José Clinic in the Midtown neighborhood in Houston waits outside to screen people who enter the clinic on Thursday, April 2, 2020.
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74An employee of the San José Clinic in the Midtown neighborhood in Houston waits outside to screen people who enter the clinic on Thursday, April 2, 2020.Photo: Elizabeth Conley, Staff photographer
Sysco, the nation’s largest food distributor, has furloughed and laid off some workers in response to the economic fallout from the novel coronavirus pandemic.
The Houston company, which has more than 69,000 employees globally, did not disclose the number of sales, warehouse, transportation and support employees worldwide who are furloughed or laid off. Sysco said it would continue to pay benefits to its non-union employees who are furloughed.
“The expense reductions that are required are difficult,” Chief Executive Kevin Hourican said in a video message to employees on Friday. “The actions we are taking are necessary, and they will ensure that we will remain a strong company from a financial and strategic perspective.”
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Sysco, which provides food to restaurants, schools, hotels and office cafeterias, said the coronavirus outbreak has caused a “dramatic reduction” in its business as consumers increasingly heed public health recommendations and mandates to stay home to slow the spread of the virus. Most schools and corporate offices are now closed, and restaurants and hotels have seen a steep drop in customer traffic.
While hospital business has remained strong and some restaurants have pivoted to takeout and home delivery, those efforts have not been enough to outweigh declining sales.
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“We have seen swift and dramatic declines in the volumes of our outbound customer demand,” Hourican said.
Sysco is now reducing hours for some of its employees, cutting capital investments to non-critical projects and is pivoting its business to new markets, including retail grocery. The company said it is not seeking a government bailout.
The layoffs in response to the coronavirus fallout are the latest round to hit Sysco employees in recent years. Sysco 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.
On HoustonChronicle.com: Houston food service giant Sysco marks 50th anniversary as challenges mount
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 Sysco’s customers.
The company on Friday said it partnered with Cincinnati-based Kroger, the nation’s largest grocery chain, to offer temporary work for furloughed Sysco workers at some Kroger distribution centers. Sysco employees who have been furloughed can work for Kroger for 30 days or more.
“This agreement will benefit many of Sysco’s associates by creating good work opportunities with a respected company, while at the same time helping to alleviate strain in the food supply chain due to a surge in demand at retail stores,” Hourican said in a statement.
paul.takahashi@chron.com