Elizabeth Warren Says Private Equity ‘Guts Everything’ From Toys R Us, Kmart To Hospitals And Prisons —Then Walks Away ‘Pockets Stuffed With Cash’

Red Lobster, Sears, Kmart, Payless ShoeSource, Toys R Us. U.S. Sen. Elizabeth Warren (D-MA.) says these aren’t just casualties of changing times—they’re crime scenes. And the culprits, she says, are private equity firms that “gut everything,” walk away rich, and leave working Americans to sweep up the rubble.

In a video posted to her Senate website in November titled “Let’s Talk About the Economy,” Warren outlined what she called the real-life consequences of unchecked private equity takeovers. 

“A few wealthy investors buy the outfit, load it up with debt, strip out the assets and suck money out of it until it collapses,” she said. “Then, after thousands upon thousands of workers have been laid off, after pensions get raided, after stores close, those private equity firms walk away with their pockets stuffed with cash.”

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Warren opened the video by rattling off a list of once-familiar names—Kmart, Sears, Payless, Toys R Us—arguing that their disappearance wasn’t inevitable. “Private equity,” she said, was what happened to them. And it didn’t stop at the mall. She pointed to Red Lobster, nursing homes, hospitals, even prisons as targets of the same financial playbook: buy a stable business, bury it in debt, extract whatever value’s left, and leave the wreckage behind.

In one example, Warren said how Red Lobster was bought using borrowed money—not the firm’s own capital—then forced to sell the land under its restaurants. The private-equity firm, she said, pocketed the proceeds, and Red Lobster now had to pay rent on land it once owned, all while drowning in loan payments. “Meanwhile, the private equity firm charges Red Lobster management fees for its helpful services,” she said. “And that’s even more money down the drain.”

She didn’t just blame these firms for store closings. She also drew a direct line from their cost-cutting to catastrophic outcomes in health care. Warren cited a Massachusetts hospital that, under private-equity ownership, lacked basic tools for a routine childbirth. A woman died as a result. “While people may have died because of his financial cost-cutting,” she said, the firm’s CEO owned two yachts.

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Warren also condemned private equity-backed prison healthcare contractors that she said cut corners by denying treatment, skipping basic plans, and isolating patients in solitary confinement instead of offering care. “This isn’t a business model,” she said. “It’s wrong.”

The video’s most emotional moment came when Warren referenced a warehouse worker who had stayed at the same job for decades, only to lose his pension right before retirement when a private equity firm ran the company into the ground. “If I lose my pension, what am I going to do?” she quoted him as asking. “Who’s going to hire a 75-year-old man?”

Warren said this isn’t just about one sector. “Private equity has sucked the life out of hospitals and nursing homes,” she said, “putting patients into life-or-death situations.” And yet, the firms behind it all are shielded from accountability. “Our system lets private equity firms collect all of the benefits of owning other companies, but take on none of the risk.”

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To address the issue, Warren highlighted two bills: the Stop Wall Street Looting Act, which would force private-equity firms to share responsibility for the damage caused by their takeovers, and the Corporate Crimes Against Health Care Act, aimed at curbing private equity’s grip on hospitals and nursing homes.

“These big Wall Street private equity firms are buying off politicians,” She warned, “lobbying the government to make sure they can keep making millions off these practices.” While Warren said senators on both sides of the aisle are beginning to take notice, she stressed the need for public pressure. “I’m sick and tired of these big private equity firms raking in the big bucks while everyone else pays the price,” she said.

Her bottom line? “It’s not a rescue plan. It’s an extraction plan.” And unless something changes, she says, Americans will keep watching their jobs, their pensions, and their communities get gutted—while someone else sails off richer.

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