CDK's 'fit and focus' revamp strategy included some job cuts

DALLAS — When Brian MacDonald returned as CDK Global's CEO last July, he promised a "fit and focus" strategy that would fine-tune product offerings to better meet dealer needs.

Six months later, the focus was emerging as CDK, no longer a publicly traded company after its acquisition by investment firm Brookfield Business Partners, touted technology advances at the NADA Show. And MacDonald also has taken steps to make the company more fit — namely previously undisclosed job cuts that happened last fall at the dealership technology giant.

MacDonald disclosed the layoffs to Automotive News ahead of the NADA Show this week but declined to share the number of eliminated positions.

The move was taken "well ahead of the other big tech companies … [that are] announcing some efficiency measures now," said MacDonald. "Our headcount came down a little bit."

The disclosure came during a broader discussion about products and innovation as CDK joined many tech companies at the show presenting new and updated products to thousands of dealership attendees.

CDK's employee reduction is part of the company's "fit and focus" initiative, MacDonald said. While he declined to share details, he said the cuts generally were made across departments and were aimed at "leveraging tooling and automation and process changes" to boost efficiency.

MacDonald noted that the moves followed his statements after taking over as CEO six months ago that he would work to enhance efficiencies and increase innovation after Brookfield closed on its $8.3 billion deal to buy CDK.

"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," MacDonald said.

CDK employs about 6,000 people. Headcount is now "where we want it to be," MacDonald said, and there are no plans for another companywide layoff at this point.

MacDonald, who led CDK from January 2016 through November 2018, also outlined the technology advances the company is promoting this week at the NADA Show.

The focus, he said, was on modernizing existing products and launching innovative offerings. That included a formal debut of CDK's Neuron Performance View reporting tool, which the company pitches as providing intelligent insight through advanced analytics, artificial intelligence and near-real-time updates. CDK also demonstrated its CDK Intelligent Connect product, a conversational AI virtual assistant that will launch in the spring and is intended to help dealers, in part, better connect with consumers.

CDK also highlighted a new virtual chief information security officer product. That tool is designed to help connect a trained security professional to dealership clients to help them develop cybersecurity strategies that comply with the Federal Trade Commission's updated Safeguards Rule to keep customer information secure. The FTC in November extended its compliance deadline for Safeguards Rule changes to June 9 of this year.