Technolgy Rules: Laundry startup FlyCleaners confirms major layoffs

Wednesday, June 12, 2019

Laundry startup FlyCleaners confirms major layoffs

FlyCleaners, a New York startup offering on-demand laundry pickup and delivery, has laid off “a large number” of its employees, co-founder and CEO David Salama told TechCrunch.

This confirms a story earlier this week in Crain’s New York reporting that FlyCleaners filed a notification with the Department of Labor outlining plans to close its Long Island City plant and lay off 116 employees.

As Salama explained when we profiled him several years ago, FlyCleaners customers can use the mobile app whenever they want someone to pick up their laundry — the startup handles pickup and return, while the actual cleaning is handled by local businesses.

In an email about the layoffs, Salama told me that the company (which raised a $2 million round led by Zelkova Ventures back in 2013) created its own team for pickup and delivery because “when we started FlyCleaners six years ago, the last-mile logistics industry was simply not where we needed it to be in order to effectively service our customers.” More recently, however, the company has been testing partnerships with other logistics companies as a way to “supplement” its own team.

“Recently, it became clear to us that the cost of our internal team was just too large to bear and it was starting to hamper our ability to execute strategically and to sustain and grow our business,” Salama continued. “And so, that [led] to the painful decision to lay off a large number of employees and to proceed as a more asset-light organization.”

He added, “We don’t anticipate that this change will materially decrease the service we offer our customers. If anything, by partnering with larger-scale logistics providers, our service should be more efficient and resilient than it currently is.”

But if partners are handling pickups, delivery and the laundry, what does FlyCleaners bring to the table? When I asked what the company will focus on moving forward, Salama said, “I prefer to be discreet about it[,] but I’m comfortable saying that our plan is to leverage our technology to create the best customer experience possible.”

He also said that the startup is working with its logistics partners to find new positions for laid-off employees.