SoftBank Set To Implement Layoffs At Vision Fund Amidst Challenges

SoftBank, the Japanese conglomerate, is reportedly gearing up for a new round of layoffs at its Vision Fund. The Vision Fund, known for its high-profile investments in technology companies around the world, has faced significant challenges in recent years, leading to a reassessment of its strategy and operations. According to sources familiar with the matter, the upcoming layoffs will primarily target employees in the fund's investment teams.

The layoffs, which might be announced in the next two weeks, could affect up to 30% of the unit's workforce, including personnel in the United States, according to one of the sources. According to a business report, SoftBank's Vision Fund unit, which has suffered severe investment losses, had 349 employees at the end of March.

The sources declined to be identified since the information was confidential. SoftBank refused to comment.
SoftBank Group International and its investing arm are reportedly contemplating a second round of layoffs, following a previous round of job cuts in September.

SoftBank, an active investor in internet businesses such as finance behemoth Klarna and TikTok owner ByteDance, has seen its portfolio's valuation fall as interest rates rise and US-China tensions rise.

SoftBank recorded a net loss of 970 billion yen ($7.2 billion) for the fiscal year ending on March 31. To offset the investment loss incurred by its Vision Fund unit, the company decided to sell a portion of its stake in Alibaba Group Holding Ltd (9988.HK). The portfolio of Vision Fund 2 was valued at $31 billion at end-March, significantly lower than its initial acquisition cost of $49.9 billion.

SoftBank has drastically reduced its investment activity, and Son has disappeared from public talks to focus on the listing of chip designer Arm.

Cambridge, England-based Arm has submitted a confidential filing for a potential listing on the U.S. stock market. The anticipated listing, expected to take place later this year, would offer SoftBank a valuable cash injection.

According to a source familiar with the situation, Intel (INTC.O) is in discussions with Arm to be an anchor investor in the chip designer's IPO.

Following the news, SoftBank's stock rose 5% in early trading on Tuesday.

While SoftBank has been adopting a defensive approach to shore up its financial sheet, the conglomerate stated in May that it is seeking for a "balance between defence and offence" - a hint that it may invest more in the future.