Former executives and senior leaders from Red Lobster have described a “miserable” workplace environment following a major Thai seafood company becoming more involved with the operations of the company, which ultimately led to its downfall. Thai Union, which owns a 49% stake in Red Lobster, took over day-to-day operations four years ago and has been accused of incompetence by former employees, resulting in the chain filing for Chapter 11 bankruptcy after closing nearly 100 locations suddenly. The company’s financial struggles have been attributed to factors such as the COVID-19 pandemic, higher interest rates, and labor costs.
After Thai Union took a more significant role in the company, they began installing their executives, leading to the rapid firing or resignation of many longtime and respected employees. The company has had five different CEOs in the last five years, further showing the instability brought upon by the Thai Union takeover. The toxic environment at Red Lobster escalated when Australian interim CEO Paul Kenny took the helm, openly criticizing and belittling employees during meetings. Kenny’s decisions, such as making the $20 unlimited shrimp promotion a permanent menu item despite pushback, and cutting longtime shrimp suppliers in favor of Thai Union at higher costs, are viewed as key contributing factors to the company’s downfall.
Red Lobster is currently investigating whether Kenny’s decision-making may have circumvented the company’s normal supply chain processes and demand planning. The company is also looking into Thai Union’s role in the downfall of Red Lobster, alleging that the seafood company had an outsized influence on shrimp purchasing. Kenny’s leadership implemented cost-cutting measures that affected operations at Red Lobster locations, such as leaving tails on shrimp in pasta, reducing kitchen staff, and removing hosts during lunch hours. These decisions led to a decline in the dining experience, with fewer managers and cooks, as well as less-enthused customers, and a drop in revenue.
The cost-cutting measures put in place by Kenny had a significant impact on the day-to-day operations at Red Lobster locations, causing an increased workload for already-stretched restaurant staff. With fewer managers and cooks on duty, employees were left to handle multiple tables and kitchen responsibilities, resulting in a subpar dining experience for customers and ultimately affecting the chain’s revenue. Red Lobster currently owes its 36,000 employees $16.7 million in unpaid wages and has disclosed plans to keep its remaining restaurants open and operating during the bankruptcy proceedings, but more location closures are expected in the future.
In conclusion, the downfall of Red Lobster can be attributed to the increased involvement of the Thai seafood company Thai Union in the day-to-day operations, which led to a series of poor decisions, cost-cutting measures, and a toxic work environment. Former employees have spoken out about their experiences at the company, highlighting the incompetence and mismanagement that ultimately resulted in the chain filing for bankruptcy. As Red Lobster navigates through its financial troubles, it faces challenges in overcoming the negative impact of Thai Union’s influence, restoring employee morale, and rebuilding customer trust to get back on track.
