Red Lobster Cuts Corporate Staff By 10%, Works To Renegotiate Leases

Red Lobster is still navigating rough waters a year after it emerged from bankruptcy, and lease terms at some of its locations appear to be part of the problem.

The seafood chain has axed 10% of its corporate staff and about 200 restaurant-level employees, Bloomberg reported.

The layoffs came as the company struggles with high rents at some locations, which are dragging down profitability, and Red Lobster is working to renegotiate some of its leases that it was unable to address during bankruptcy.

Red Lobster has closed more than 100 restaurants, but it was unable to restructure some leases during the bankruptcy process because they were part of master agreements covering many locations.

“The biggest ongoing challenge with leases stems from a small number of legacy agreements,” a Red Lobster spokesperson said in a statement to Bisnow. “These leases are above market rate and continue to be a drag on profitability.”

The spokesperson added that the costly leases were signed by previous leadership, primarily as part of a 2014 sale-leaseback deal. In that $1.5B deal, Red Lobster's business was acquired by Golden Gate Capital, while its real estate was spun off and sold to American Realty Capital Properties, which leased the spaces back to the chain. 

“Our current leadership is actively working to address this issue, which is critical to unlocking further growth,” the spokesperson said. 

Reports of Red Lobster’s looming bankruptcy began circulating in April 2024 following a limited-time endless shrimp promotion that brought more financial stress to the already beleaguered company. It filed for bankruptcy the following month. 

Red Lobster was acquired by Fortress Investment Group, one of the company’s previous lenders, through the bankruptcy proceedings in September 2024. Fortress submitted a $376M bid for the company after providing $100M in bankruptcy financing. It was the only competitive offer.

After the investment firm’s acquisition was finalized, it installed Damola Adamolekun as Red Lobster’s new CEO.

“As part of our new ownership structure, we have backers who have a history of making successful investments in restaurants,” he said in a statement. 

“Our comprehensive and long-term investment plan for Red Lobster includes a commitment of more than $60 million in new funding which will help us to deliver improvements across every aspect of our company.”

Red Lobster is one of many casual, sit-down restaurant chains that have struggled in recent years. TGI Fridays also filed for bankruptcy in 2024, and Hooters followed suit in March 2025.