(Sept 29): SoftBank Group Corp has started laying off employees at its loss-making Vision Fund and is expected to cut at least 30% of its staff, according to people familiar with the matter.
The Tokyo-based company began telling some workers of the reductions Thursday with at least 150 likely to be affected, said the people, asking not to be named as the information is not public. The Vision Fund unit, headquartered in London, had about 500 employees including staff at the Latin America fund.
A spokesman for the Vision Fund didn’t immediately respond to requests for comment.
Masayoshi Son, the billionaire founder of the group, had said in August he would implement cost cuts at his conglomerate and the Vision Fund investment arm after a record US$23 billion loss.
Most of the losses came from a plunge in the valuations of portfolio companies, including South Korea Coupang Inc and DoorDash Inc. SoftBank also reported a US$6 billion foreign exchange loss because of the weaker yen.
Internally, SoftBank debated how deeply to cut the Vision Fund unit. It planned staff cuts of at least 20%, Bloomberg News reported earlier this month, yet some executives argued for as high as 50%.
The Japanese entrepreneur said he would take defensive steps to navigate a prolonged tech downturn. SoftBank said last month that it had raised more than US$17 billion by selling forward contracts on Alibaba Group Holding Ltd, the Chinese e-commerce company whose meteoric growth cemented Son’s reputation as a startup investor.
Son is trying to wait out the technology slump so that he can pull off a successful initial public offering for Arm Ltd, the chip designer that SoftBank bought for US$32 billion. The CEO has said he aims to make the offering the biggest-ever for a chip company.