FICO Cuts 15% of Workforce in AI Restructuring Amid Regulatory Pressure

Fair Isaac Corporation (FICO) is reducing its global workforce by approximately 15%, affecting roughly 570 employees, as the credit-scoring giant undertakes a restructuring tied to automation and artificial intelligence integration, according to a Reuters report. The staff reductions arrive as the company navigates a steep decline in its stock price driven by federal efforts to introduce competition to its mortgage scoring monopoly.

"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 to Reuters.

Severance Costs and Timeline

Regulatory filings indicate that Fair Isaac maintained 3,811 employees at the close of September 2025, pointing to an impact on approximately 570 workers under the 15% reduction figure reported by Reuters.

The restructuring carries notable immediate expenses. FICO expects to incur approximately $27 million in pre-tax charges during the fourth quarter of fiscal 2026, primarily stemming from severance payments and employee termination costs. According to the Reuters coverage, the execution of the restructuring plan will span multiple quarters, with full implementation largely expected by the third quarter of fiscal 2027.

Regulatory Headwinds and Market Performance

These operational changes coincide with market pressures on the firm's valuation. Shares of the company have plunged about 58% this year, weighed down by mounting policy challenges from Washington.

U.S. regulators, led by the Federal Housing Finance Agency (FHFA), have actively pursued measures to loosen Fair Isaac's longstanding dominance in mortgage credit scoring. The FHFA has directed government-sponsored enterprises Fannie Mae and Freddie Mac to permit lenders to utilize rival scoring models such as VantageScore, directly threatening the proprietary pricing power that has long anchored the company's business model.