Retail technology giant CDK Global will unload an undisclosed number of its employees onto Genpact, a global business process outsourcer, as part of its continued “fit and focus” strategy to reorganize and boost efficiency. While CDK is acknowledging that some jobs will be eliminated, company officials also said they expect most affected employees will continue working for CDK through Genpact.
CDK CEO Brian MacDonald announced the move in a Feb. 22 email to employees that was obtained by Automotive News and confirmed by CDK. CDK’s goal, MacDonald said in the email, is to free up resources to boost customer service, planning and strategic initiatives for the Hoffman Estates, Ill., dealership management system company.
The plan calls for outsourcing most of CDK’s enterprise information technology unit, as well as parts of its technology, product, customer, finance and procurement divisions in the coming months to Genpact, according to MacDonald’s email. It’s unclear how many workers will be moved to Genpact. CDK, acquired last year by Brookfield Business Partners, employed about 6,000 people as of late January.
“Shifting workloads to a managed services provider makes strategic sense for our business and the alternative would have been deep cuts to our workforce,” MacDonald said in his email, which was signed “Best, Brian.”
Affected employees in North America and India will receive offers to work for Genpact in the coming weeks and will continue to support CDK as Genpact employees, MacDonald said in the note.
He added that there “will be some eliminations on some teams” but the company will help “people find other roles at CDK and will work closely with each affected person to support them financially and professionally as best we can.”
MacDonald’s employee announcement came about a month after he told Automotive News that CDK had no plans for another companywide layoff. Those comments followed a disclosure that CDK had made job cuts in late 2022 as part of streamlining efforts; the technology giant did not reveal the number of positions eliminated then.
In January, MacDonald also told Automotive News that CDK’s head count is now “where we want it to be.”
How many impacted?
CDK did not disclose to Automotive News how many employees will be affected by the Genpact decision, nor did it provide the specific time frame involved for the outsourcing process. The company did not respond by publication deadline to requests to interview MacDonald about the outsourcing to Genpact.
CDK spokesman Tony Macrito told Automotive News via email that “the transition will happen gradually,” and customers “can continue to expect to receive the same industry-leading service they always have.”
CDK has made a concerted effort in recent years to improve its customer service, simplify its billing and roll out initiatives such as a customer rewards program. It is unclear whether the outsourcing plan will affect those and other initiatives.
CDK counted 9,181 automotive DMS customer sites as of Dec. 31, 2021, and said roughly 12,000 automotive customers used its products in North America at that point. It was still a public company at the time, but Brookfield Business Partners took CDK private last July in a deal worth about $8.7 billion, designed to accelerate the company’s strategy to create a seamless vehicle-purchasing experience for consumers. MacDonald had led CDK from January 2016 through November 2018 and returned in July as CEO after the Brookfield deal, with a goal of refocusing priorities and streamlining.
“When we took over the company, we told the employee base one of the key priorities would be getting fit and focused, and focused on what we want to do and be really good at that and deprioritize [other] things and get a little bit fitter,” McDonald told Automotive News in January.