SoftBank’s Vision Fund to Start Job Cuts as Soon as This Week
(Bloomberg) -- SoftBank Group Corp.’s Vision Fund is preparing to start another round of layoffs as soon as this week, following an approximate 30% reduction last fiscal year, according to people familiar with the matter.
Most Read from Bloomberg
Putin Blasts Wagner ‘Traitors’ After Prigozhin Denies Coup Plot
Student Loan-Relief Backers Warn Biden ‘Failure Isn’t an Option’
Putin Faces Historic Threat to Absolute Grip on Power in Russia
Russia Latest: Zelenskiy Adviser Says Wagner Remains in Ukraine
About 13% of the Vision Fund staff will be affected, one person said. The headcount reduction will mostly occur in the US, another person said, asking not to be identified as discussions are private. The investment unit had about 349 people globally as of end-March.
A Vision Fund spokesperson declined to comment. SoftBank shares fell as much as 1.8% in early morning trade in Tokyo Thursday, paring gains made earlier this week.
The cuts follow five straight quarters of losses at the Vision Fund, reflecting the tough environment for technology investment. Global startup valuations have tanked, hurt by heightened caution around loss-making firms as rising interest rates, widespread economic malaise and the collapse of Silicon Valley Bank sap liquidity.
It’s unclear how deep the cuts will be in the end. Reuters earlier reported layoffs could affect 30% of the fund’s staff. SoftBank last year reduced the number of its Vision Fund by about 30% from about 500 people as the investor drastically cut back on the number of startup investments.
The gargantuan investment fund that Masayoshi Son proudly set up in 2017 lost a record ¥4.3 trillion ($30.3 billion) for the full fiscal year ended March. The losses came despite a rebound in tech stocks in the latter part of the year as the Vision Fund continued to mark down a number of its private holdings.
SoftBank and Son have thrown their weight behind the imminent IPO of Arm Ltd., a British chip designer among several major tech firms expected benefit from the rollout of AI. Arm is expected to raise at least $10 billion in one of the year’s most anticipated debuts, potentially vindicating Son’s years-long proselytization of AI.
Son, who had shunned the public eye for seven months, returned to the stage this week to address SoftBank shareholders and acknowledge he had made mistakes in the past through bad investments. But he appeased enthusiasts by saying SoftBank plans to go back on the offensive in investing soon, seeking to establish his credentials in the burgeoning field of artificial intelligence.
When he was questioned by a shareholder about how SoftBank plans to cope with continued losses at the Vision Fund, Son, who survived the dot-com bust, brushed off the concern.
“That’s a tough question. But a gain or loss of like ¥2 trillion, ¥3 trillion is within the margin of error,” Son said. “I know this may not be the way to address this for shareholders, but that’s how I think of it at the bottom of my heart. So I’m just being frank.”
--With assistance from Takahiko Hyuga and Anto Antony.
(Updates with share price reaction in third paragraph)
Most Read from Bloomberg Businessweek
The World’s Empty Office Buildings Have Become a Debt Time Bomb
The ‘Extend and Pretend’ Real Estate Strategy Is Running Out of Time
Race-Based Affirmative Action Is Over. Corporate Diversity Could Be Next
The Problem With Fashion’s Sustainability Push: It Doesn’t Make Much Money
©2023 Bloomberg L.P.