FICO to cut 15% of staff, reduce management layers

Fair Isaac Corp., whose Classic FICO score has long been the dominant credit model in mortgage underwriting but is facing increased competition, will cut 15% of its workforce and streamline its operations.FICO said it will reduce management layers, simplify its operating structure, optimize processes and tools, and integrate AI-driven product development as part of its plan, according to a filing with the Securities and Exchange Commission (SEC) on Tuesday. The company had 3,811 employees at the end of September 2025. The workforce reduction began this week and is expected to be completed by the end of the third quarter of fiscal year 2027. FICO estimated it will record about $27 million in pretax charges in the fourth quarter of 2026 tied to severance and related costs. A spokesperson for FICO did not immediately reply to HousingWire‘s request for comments. The move comes as federal mortgage regulators and major lenders move to embrace competing credit score models. In early September, Federal Housing Finance Agency (FHFA) said all Fannie Mae– and Freddie Mac-approved lenders could use either the legacy Classic FICO model or VantageScore 4.0 for loans sold to the government-sponso...