Sysco Cuts Jobs, Furloughs Workers as Coronavirus Pinches Sales

By Micah Maidenberg

Sysco Corp. warned the coronavirus pandemic will hit sales and said it is cutting costs as restaurant customers struggle with limited operations.

The food distributor on Monday warned in a filing it will see a decrease in sales, characterizing the decline as short term. To respond, Sysco over the past two weeks has cut jobs, implemented hiring freezes and furloughed employees, the company said.

Sysco also has carried out what it termed significant reductions in capital spending, suspended its share buyback program and borrowed $1.6 billion under a $2 billion credit line in order to strengthen its liquidity position, the company said.

Houston-based Sysco said it is looking for new business with customers like retailers, who have seen a surge in demand as consumers purchase more groceries as they stay in large part at home to avoid the coronavirus and help halt its spread.

But the distributor also has a major business servicing restaurants, many of which are only offering delivery, drive-through meals and take out to comply with government restrictions. That has hurt demand for its food among chains and indepedent operators.

Sysco also said Monday it is working to prepare "for the eventual return of demand for food-away-from-home."

Write to Micah Maidenberg at [e-mail]

(END) Dow Jones Newswires

March 30, 2020 08:45 ET (12:45 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.