US wholesale food giant Sysco (NYSE:SYY) has entered a deal with Cognizant (NASDAQ: CTSH) to outsource all US customer service operations, according to the Houston Chronicle, which cites an internal employee memo. The deal means Sysco will lay off roughly 30 employees.
Based in Houston, Texas, Sysco has been under pressure since activist investor Nelson Peltz took a significant stake and two board seats in the company. Sysco is a major supplier to restaurants and institutional food service operations across the US, competing with the likes of Gordon Food Service (GFS). Unlike Sysco, GFS has a strong regional “cash & carry” operation, or stores geared towards small business customers but open to the public.
A year ago, Sysco cut almost 300 employees from its Cypress, Texas shared services center; amounting to over 9% of its corporate support staff. The distributor has a new CEO starting February 1, CVS Pharmacy President Kevin Hourican is replacing Tom Bene.
“We very much appreciate the support that our customer service associates have provided to our customers. We will ensure that all impacted associates receive transition support and are treated with the utmost respect throughout the process,” said Paul Moskowitz and Greg Bertrand, executive vice presidents, in the internal memo, said the Chronicle.
Cognizant is a global outsourcing firm with BPO and customer service operations on every continent except Antarctica. So far it is unknown whether the outsourcing operations will remain in the US or be handled internationally.
Photo courtesy Cognizant