Former executives and senior managers at Red Lobster have described “devastating” work conditions in a new report after a major Thai seafood company took control, leading to the company’s sudden collapse.
The Orlando, Florida-based chain filed for Chapter 11 bankruptcy protection on May 19 after abruptly closing nearly 100 stores last week.
The filing comes four years after Thai Union, which owns a 49 percent stake in Red Lobster, became the company’s largest shareholder and had a stake in its day-to-day operations.
According to CNN, former employees claim that Thai Union’s incompetence ruined the company.
“The last year and a half that I was there, it was miserable to work there,” said Les Foreman, a West Coast division vice president who worked for Red Lobster for 20 years and was laid off in 2022. He told the network. “They had no idea about running a restaurant company in America.”
Thai Union cites the COVID-19 pandemic, rising interest rates and labor costs as reasons for its financial difficulties.
After Thai Union became the largest shareholder, the company began installing its own executives, forcing many long-time, respected employees to quit or resign abruptly, executives told CNN.
The company has had five CEOs in the past five years as part of personnel changes.
When Thai Union CEO Tirapong Chansiri visited Red Lobster’s Orlando headquarters in 2022, he brought along a feng shui consultant, who determined the boardroom was unusable because it had “bad feng shui,” a company executive told the outlet.
According to CNN, conditions at the company deteriorated during Thai Union’s takeover, especially after Australian interim CEO Paul Kenny took over as head of the company in 2022. Kenny was part of a Thai Union-led investor group that bought a majority stake in Red Lobster.
During the meetings, Kenney openly criticized and belittled employees, according to a former Red Lobster executive who worked closely with Kenney.
Kenney decided in May 2023 to introduce the discontinued $20 all-you-can-eat shrimp promotion as a permanent menu item “despite significant opposition from other members of the company’s management team,” according to the filing.
According to the filing, Kenney ended deals with two of Thai Union’s longtime shrimp suppliers, competitors, in order to buy more shrimp from Thai Union at higher prices.
Red Lobster is “investigating whether Kenney’s decision-making process circumvented the company’s normal supply chain and demand planning.”
Thaibus also said in its complaint that it is investigating the role that Thailand-based seafood company Thai Union played in its collapse, alleging that the company “exercised undue influence over the Thai market.” [company’s] “Purchase of shrimp”
Kenney’s leadership has significantly impacted Red Lobster’s restaurant operations as a result of numerous cost-cutting measures that have impacted the dining experience.
Employees told CNN that they kept shrimp tails for pasta dishes and eliminated the sauté station in the kitchen to cut labor costs.
Waiters were now serving 10 tables instead of three, and hosts were eliminated at lunchtime, all in the name of customer service.
Barry Fulghum, who started at Red Lobster as a dishwasher in the 1970s and later worked his way up to operations manager, said there were fewer managers and cooks than ever before during this time.
Barry Fulgham, who started at Red Lobster as a dishwasher in the 1970s and rose to director of operations before retiring last year, said restaurant staff are overburdened and there are fewer managers and cooks than ever before.
“There were times when we only had one or two people working the kitchen line,” he said, “and considering the staffing we had at the time, it was amazing what work they did on the line.”
The result was less customer enthusiasm and less revenue.
Red Lobster has 36,000 employees and owes $16.7 million in unpaid wages, according to the filing.
Red Lobster said its remaining restaurants will continue to operate as usual during the bankruptcy proceedings, but that it plans to close more locations.
