Fair Isaac (FICO) has announced plans to cut 15% of its workforce as the credit score provider faces new competitive threats to its business.
In a regulatory filing, Fair Isaac said that it will eliminate 15% of its staff, a move that will cost the company $27 million U.S. in pretax charges for the fourth quarter of this year.
Management said in the filing that Fair Isaac will rely more on artificial intelligence (A.I.) as part of the workforce reduction plan.
The job cuts come as Fair Isaac faces strong criticism from the U.S. government over recent price hikes and new competition to its business emerges.
Bill Pulte, the director of the U.S. Federal Housing Finance Agency, recently said a new mortgage pricing structure would incorporate VantageScore, a competitor to Fair Isaac’s FICO scores.
That news led Fair Isaac’s stock to post its worst one-day drop since 1989.
The administration of U.S. President Donald Trump is trying to increase competition in the credit score market and break Fair Isaac’s near monopoly after the company raised prices.
By some accounts, Fair Isaac has increased the prices it charges for mortgage credit scores by 1,800% (an 18-fold increase) since 2020.
The situation has weighed on FICO stock, which is down 63% in the last 12 months and trading at $695.46 U.S. per share.
Tech Insider
