Fair Isaac, the company behind the FICO credit score, is laying off about 15% of its workforce as part of an AI-driven restructuring amid rising competition, Reuters reported.
The company did not disclose a headcount for the cuts, but with 3,811 employees at the end of September 2025, the reduction implies roughly 570 positions. Management committed to the plan on Oct. 1 and began notifying employees this week. FICO expects about $27 million in pretax charges in fiscal Q4 2026, mostly for severance and related costs, with the plan substantially complete by the end of fiscal Q3 2027.
“This simplified structure will allow us to operate and bring innovations to market faster and create more value for our customers,” FICO said in a statement.
The cuts follow a smaller 2025 restructuring in which FICO eliminated 226 positions and recorded $10.9 million in employee separation costs. On its July 29 earnings call, CFO Steven Weber had already warned that fiscal fourth-quarter expenses would include “some anticipated one-time restructuring charges.”
The downsizing also comes as FICO faces growing competition in the mortgage credit-scoring market. On Sept. 9, the Federal Housing Finance Agency said all Fannie Mae- and Freddie Mac-approved lenders could use VantageScore 4.0 for eligible loans without obtaining prior written approval. Later that month, Fannie Mae and Freddie Mac aligned upfront pricing across Classic FICO and VantageScore 4.0, placing the competing models on the same pricing framework.
Soon after, Rocket Mortgage named VantageScore 4.0 its preferred scoring model for eligible loans and said it would begin defaulting to the model during the fourth quarter.
The market reaction was severe. FICO shares plunged 26.5% on Sept. 29, the company’s worst trading day since 1989, and have lost roughly 60% of their value this year, according to Barron’s.