Credit-rating giant Fair Isaac (FICO) announced on October 6, 2026 that it plans to cut about 15% of its workforce. The company said the decision was driven by the need to streamline its operating structure and bring artificial intelligence into product development. According to Reuters, the cuts will affect roughly 570 people at the company, which employed 3,811 people at the end of September 2025; FICO began notifying employees this week.

Announcement details

"The company said it would cut about 15% of its workforce as part of streamlining its operating structure and bringing artificial intelligence into product development." (Reuters, 2026-10-06)

The Wall Street Journal reports that the cuts will reduce the number of management layers and simplify the operating structure. The plan also calls for a shift to AI-driven product development — meaning the company intends to make broader use of artificial intelligence in building its products.

FICO has not yet answered a Reuters question about the exact number of affected employees, but the company itself disclosed its headcount of 3,811 as of the end of September 2025. Based on that figure, a 15% reduction would cover about 570 jobs. Employee notifications began in the week of the announcement — so the cuts will not be limited to a one-time statement but will be carried out in stages.

The two main pillars of the announcement — streamlining the structure and bringing AI into product development — are presented in the sources not separately but as parts of a single plan. WSJ notes in the same report both the reduction of management layers and the plan's coverage of AI-driven product development.

Key figures at a glance

  • 15% — the share of employees planned for layoffs;
  • 3,811 — total headcount at the company at the end of September 2025;
  • ~570 — the number of employees the cuts could affect (Reuters estimate);
  • $27 million — expected pre-tax charges in the fourth quarter of fiscal 2026, mostly severance payments;
  • Q3 of fiscal 2027 — when the plan is expected to be substantially complete;
  • ~60% — the decline in FICO shares since the start of the year.

Costs and plan timeline

The restructuring-related costs were also disclosed. FICO expects to record about $27 million in pre-tax charges in the fourth quarter of fiscal 2026, with the bulk of the sum tied to severance payments for laid-off employees.

The company says the restructuring plan will be substantially complete by the third quarter of fiscal 2027. So the charges will be booked in a single quarter, while the plan itself spans several quarters: employee notifications have already begun, and payments and structural changes will be completed over subsequent quarters.

The fact that severance makes up the bulk of the charges means the plan's financial burden is mainly tied to compensation for laid-off employees. The company will record these charges on a pre-tax basis.

Growing competitive pressure

The announcement comes at a difficult time for the company. According to The Wall Street Journal, Fair Isaac came under serious pressure this year as competition intensified: after Fannie Mae and Freddie Mac allowed borrowers to use alternative credit scores when taking out loans, FICO shares have fallen nearly 60% since the start of the year.

Allowing alternative credit scores hit the company's traditional advantage — WSJ writes that the company came under pressure precisely after that decision. Against this backdrop, streamlining the operating structure, cutting management layers, and bringing AI into product development look like steps toward cutting costs.

The Fannie Mae and Freddie Mac decision lets borrowers use alternative scores instead of FICO when borrowing. It was after this decision that the company came under pressure, and its shares have fallen nearly 60% since the start of the year.

The AI bet

The second key driver behind the cuts is the bet on artificial intelligence. Both sources stress that the plan is being carried out specifically on an "AI-driven" basis: it is not just about reducing headcount but about rebuilding the product-development process itself with the help of AI.

In FICO's announcement, "streamlining the structure and bringing artificial intelligence into product development" are presented as two linked goals. The Wall Street Journal separately notes that the plan includes AI-driven product development. In short, the company is moving to a model of working with fewer employees but greater reliance on AI tools.

FICO is known as a giant in the credit-rating industry; its main product is credit scores. AI is now being brought into the very process of creating those products.