Fair Isaac to Cut Staff, Operations

Fair Isaac Corp. (NYSE: FIC) reported yesterday it had begun a restructuring plan that included selling or closing certain divisions, reducing staff and instituting various cost cutting measures. The plan could reduce costs by as much as $100 million this year.

Fair Isaac is in a competitive battle with the three major credit bureaus Equifax, Experian and TransUnion, to provide financial institutions with credit ratings of consumers.

The Minneapolis-based provider of analytics and consumer ratings reported it would sell its Insurance Bill Review unit to Mitchell International for an undisclosed price. The sale will mean a loss of 220 employees, and reduce revenues and costs by about $65 million annually.

Fair Isaac also plans to sell or discontinue its Cortronics Neural research; the advertising portion of its marketing services division; government related contracts; a diagnostic program for veterinary medicine; and certain telecom applications.

Fair Isaac will also eliminate about 200 jobs, resulting in a one-time second quarter pre-tax charge of $29 million, and annualized pre-tax savings of $29 million. Fair Isaac had more than 2,800 staff at the end of its last fiscal year Sept. 30, 2007.

The company also plans to continue a hiring freeze, to close or consolidate more than a dozen offices, and cut other costs to result in pre-tax savings of $6 million. The company will take a $1 million charge in the second quarter for the closings.