FICO Cuts About 15% of Positions in AI-Focused Restructuring After Mortgage-Scoring Setbacks

FICO said it will trim about 15% of its workforce as part of a broader restructuring and AI integration. In a Form 8-K filed after Tuesday's close, the company said management committed to the plan on October 1 to reduce layers in the organization, simplify the operating structure, optimize processes and tools, and integrate AI-driven product development. FICO did not give a headcount; Reuters estimated the cut could affect about 570 workers, based on the 3,811 employees the company reported at the end of September 2025.

According to the filing, FICO expects about $27.0 million in pre-tax charges in the fourth quarter of fiscal 2026, primarily severance, and expects the plan to be substantially complete by the end of fiscal Q3 2027. It disclosed no savings target. "This simplified structure will allow us to operate and bring innovations to market faster and create more value for our customers," the company said in a statement to Reuters.

The filing does not mention the mortgage business, but the cut lands weeks after two regulatory setbacks that outlets tie to the stock's slide. On September 3, the Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to accept VantageScore 4.0 from all lenders, and on September 29 FHFA Director Bill Pulte said the two would use a single pricing grid placing VantageScore alongside Classic FICO. Per The Deep Dive, the shares fell roughly 17% after the first move and about 27% on September 29, their steepest daily drop since 1989, and they remain down about 58% this year.

The market's first read was negative: FICO traded at $673.78 around midday Wednesday, down 3.1%. Whether the cut materially changes FICO's margin outlook is the open question, and the company has not quantified the savings. Investors will likely look to the fiscal fourth-quarter report for a savings figure and for any sign of how much mortgage-score volume shifts to VantageScore under the new pricing grid.