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Kroger to Accept Furloughed Sysco Employees as Temporary Workers

By Eric Volkman - Mar 30, 2020 at 9:05AM

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The supermarket chain operator will effectively borrow these workers, who are technically still employed by Sysco.

As the coronavirus outbreak intensifies in this country, Kroger (KR -0.17%) is taking on tens of thousands of workers. Many of these workers were recently let go from restaurants and other businesses hit hard by the coronavirus, and the company has developed partnerships with a number of such enterprises. On Friday, Sysco Corporation (SYY -0.75%) announced it had become a partner in this growing Kroger alliance.

The two companies signed a formal agreement, under which Sysco workers who have been temporarily furloughed can be absorbed by Kroger. Their partnership will last at least 30 days, according to terms agreed upon by both companies.

A Sysco warehouse.

Image source: Sysco.

Sysco said that those workers would technically remain Sysco employees, and would be paid by that company, during their time at Kroger. Sysco is also to provide benefits for those workers who are eligible to receive them.

Even the largest supermarket chains and delivery services have come under exceptional strain during the coronavirus pandemic. Stay-at-home measures enacted by authorities limit customer movement, while demand for delivery services providing food and other necessities has risen sharply. Even companies that offer such services were simply unprepared for this.

"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," Sysco said in the press release announcing its move.

So far during the pandemic, Kroger has hired roughly 23,500 workers, and is planning to take on an additional 20,000.

On Friday, the two consumer goods stocks followed different paths. Sysco fell more deeply than the broader stock market, dipping by nearly 6%. Kroger traded marginally higher on the day.

 

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

The Kroger Co. Stock Quote
The Kroger Co.
KR
$46.79 (-0.17%) $0.08
Sysco Corporation Stock Quote
Sysco Corporation
SYY
$81.72 (-0.75%) $0.62

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