FICO cuts workforce by 15% as part of AI-driven restructuring

Credit-scoring company Fair Isaac, or FICO, announced on Tuesday that it will reduce its workforce by approximately 15% as part of an AI-driven restructuring effort, joining a growing list of US firms cutting jobs to automate tasks and invest in technology. The restructuring aims to streamline FICO's operations, enabling the company to innovate more rapidly and generate greater value for its customers.

Although the exact number of employees affected has not been disclosed, the cuts are estimated to impact around 570 workers, given that FICO had 3,811 employees at the end of September 2025. The company began notifying employees of the layoffs this week and expects to incur about $27 million in pre-tax charges in the fourth quarter of fiscal 2026, primarily due to severance costs.

The restructuring plan is anticipated to be fully implemented by the third quarter of fiscal 2027. FICO, renowned for its FICO score—a critical measure of consumer credit risk widely utilized by banks, credit card issuers, mortgage lenders, and auto loan providers—has experienced a significant decline in its stock price this year, with shares falling about 58%.

This downturn is attributed to increasing regulatory pressure from US authorities, who are seeking to diminish FICO's longstanding dominance in mortgage credit scoring. Recently, the US Federal Housing Finance Agency (FHFA) directed mortgage finance giants Fannie Mae and Freddie Mac to permit all lenders to utilize VantageScore, a competing scoring model developed by Equifax, Experian, and TransUnion, for credit scoring purposes.

FHFA Director Bill Pulte also revealed that Fannie Mae and Freddie Mac would adopt a unified pricing structure for both VantageScore and FICO scores, thereby equalizing the competition and potentially undermining FICO's longstanding position as the predominant metric for assessing consumer credit risk in mortgage lending.