Item 2.05. Costs Associated with Exit of Disposal Activities
On September 14, 2020, Fair Isaac Corporation (the "Company") committed to a
course of action designed to reduce its operating costs in lower value, less
strategic areas of the Company's business in order to facilitate incremental
investment in higher value, more strategic areas while also adjusting the
Company's facilities footprint in light of post-pandemic workforce patterns. The
Company expects this course of action to result in an aggregate of approximately
$36 million in annual expense savings beginning in fiscal 2021, consisting of
$8.7 million in reduced facilities expense and $27.3 million in reduced employee
expense.
Specifically, the Company will close certain non-core offices and reduce office
space in other locations to better align with anticipated needs, and reduce its
global workforce by 3.5%, affecting approximately 140 positions. The Company
expects these actions to result in an aggregate pre-tax charge of approximately
$42 million in the fourth quarter of fiscal 2020, substantially all of which
will result in future cash expenditures. This aggregate pre-tax charge will
consist of approximately $34 million in costs related to future cash lease
obligations for the closed or consolidated locations, net of anticipated
sublease income, and approximately $8 million in severance and related pre-tax
costs for the headcount reduction.
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