Former executives and senior leaders from Red Lobster have described in a new report the “miserable” workplace environment after a major Thai seafood company began running things, leading to the company’s sudden downfall.
The Orlando, Fla.-based chain filed for Chapter 11 protection on May 19 after unexpectedly closing nearly 100 locations last week.
The filing comes four years after Thai Union — which owns a 49% stake in Red Lobster — became the company’s largest shareholder and got involved in day-to-day operations.
Former employees claim Thai Union’s incompetence destroyed the company, according to CNN.
“It was miserable working there for the last year and a half I was there,” Les Foreman, a West Coast division vice president who worked at Red Lobster for 20 years and was fired in 2022, told the network. “They didn’t have any idea about running a restaurant company in the United States.”
Thai Union has blamed the COVID-19 pandemic, higher interest rates and labor costs for its financial struggles.
After Thai Union became the largest shareholders, it began installing its own executives, forcing many longtime and respected employees to be fired or resign rapidly, senior leaders told CNN.
The company has had five CEOs in the last five years amid the shakeup.
When Thai Union CEO Thiraphong Chansiri visited Red Lobster’s Orlando headquarters in 2022, he brought a feng shui consultant who determined that the executive offices had “bad feng shui” and couldn’t be used, one company leader told the outlet.
The environment at the company became toxic during the Thai Union takeover — especially when Australian interim CEO Paul Kenny became head of the company in 2022, according to CNN. Kenny was part of the Thai Union-led investor group that bought the majority stake in Red Lobster.
During meetings, Kenny would openly criticize and belittle employees, according to former Red Lobster leaders who worked closely with him.
Kenny made the decision in May 2023 to implement the doomed $20 unlimited shrimp promotion as a permanent menu item “despite significant pushback from other members of the company’s management team,” the filing said.
Kenny had cut two of its longtime shrimp suppliers — Thai Union’s competitors — to buy more shrimp Thai Union at high costs, the filing says.
Red Lobster is “investigating whether Mr. Kenny’s decision-making process circumvented the Company’s normal supply chain and demand planning.”
Tibus also disclosed in the filing that the company is investigating Thai Union’s role in its downfall, alleging the Thailand-based seafood company “exercised an outsized influence on the [company’s] shrimp purchasing.”
Kenny’s leadership had a profound impact on operations at Red Lobster locations as a result of a number of cost-cutting measures that affected the dining experience.
They began leaving tails on shrimp in pasta and eliminated the kitchens’ sauté stations to slash labor costs, an employee told CNN.
Servers started covering 10 tables instead of three, and hosts were removed during lunch hours — purportedly in the name of customer service.
There were fewer managers and cooks than ever before during this time, according to Barry Fulghum, who worked his way up to operations manager after starting as a dishwasher at Red Lobster in the 1970s.
Overstretched restaurant staff had fewer managers and cooks than ever, said Barry Fulghum, who started out as a dishwasher at Red Lobster in the 1970s and worked his way up to become an operations director, retiring last year.
“There would be times we would have one or two people working the kitchen line,” he said. “What those cooks did on the line was amazing given the staffing situation they were dealt.”
The result was less-enthused customers and a drop in revenue.
Red Lobster has 36,000 employees and owes them $16.7 million in unpaid wages, according to the filing.
Red Lobster said its remaining restaurants will be open and operate as usual during the bankruptcy proceedings but plans to shutter additional locations.
