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Fair Isaac Corp., the credit-scoring company known as FICO, plans to eliminate about 15% of its positions as it simplifies its organization and incorporates artificial intelligence into product development. The company disclosed the plan in a Form 8-K filed October 6, 2026, saying employees began receiving notifications during the week of October 5.
FICO did not disclose the number of jobs affected. Reuters reported that the company had 3,811 employees at the end of September 2025, a figure that would put 15% at roughly 570 positions if staffing were similar when the cuts are carried out. FICO expects the restructuring to be substantially complete by the end of its fiscal third quarter of 2027.
Company cites organizational changes and AI development
In its filing, FICO said the plan would reduce management layers, simplify its operating structure, optimize processes and tools, and integrate AI-driven product development. The filing did not identify which teams, locations or job functions would be affected, or explain how much of the workforce reduction was directly tied to automation rather than broader organizational changes.
FICO told Reuters that a simplified structure would help it operate and bring innovations to market faster and create more value for customers. The company did not specify a total headcount reduction in its response, and its filing did not give a breakdown of the positions to be eliminated.
Severance charges expected in fiscal 2026
FICO estimates the plan will result in about $27 million in aggregate pretax charges in the fourth quarter of fiscal 2026. The filing says the costs consist of employee severance and related expenses, calculated under the company’s existing severance plan or applicable local legal requirements; substantially all are expected to involve future cash payments.
The estimate is a forecast, not a final cost. FICO cautioned in its filing that the expected scope, timing and charges are forward-looking and could differ from actual results. It did not provide a more detailed schedule of payments or say how the reduction might affect particular business units.
Credit-scoring business faces a changing mortgage market
The workforce move comes as FICO’s position in mortgage credit scoring faces increased regulatory competition. Reuters reported that the Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to allow lenders to use VantageScore, a rival scoring model developed by Equifax, Experian and TransUnion.
Reuters also reported that FHFA Director Bill Pulte said the housing-finance companies would use a single pricing grid for FICO and VantageScore. That change could put the competing models on more equal terms in mortgage lending, where FICO scores have long been widely used by lenders. The restructuring filing itself does not link the job cuts to the regulatory developments.
Next steps remain only partly specified
FICO’s stated timeline runs through the end of fiscal third-quarter 2027, but the company has not publicly detailed when specific groups will be notified beyond saying notifications began the week of October 5. It also has not disclosed the exact number of affected employees or how the changes will be distributed across its operations.
The filing describes the reduction as part of a plan to reshape the organization and incorporate AI into product development, while the company’s public comments emphasize faster operations and innovation. The documents do not quantify expected savings or describe specific products or processes that will be developed using AI.
