SoftBank's Vision Fund set for new wave of layoffs

SoftBank Group Corp is preparing to implement a new wave of job cuts at its Vision Fund investment division, marking the most recent cost-reducing measure undertaken by the Japanese conglomerate.

Within the next fortnight, SoftBank Group Corp is anticipated to unveil potential layoffs that could affect as much as 30% of its workforce at the Vision Fund investment arm, including employees in the United States, as stated by one of the sources. 

As per a report by Reuters, the Vision Fund unit of SoftBank had a total headcount of 349 by the end of March, and it has incurred significant investment losses. If implemented, this would come after the global reduction of approximately 150 positions at the investment division and SoftBank Group International in September.

SoftBank, known for its proactive investments in tech companies like fintech giant Klarna and TikTok owner ByteDance, has witnessed a decline in the valuation of its portfolio due to significant interest rate increases and escalating tensions between the United States and China.

For the fiscal year ending on March 31, SoftBank Group reported a net loss of 970 billion yen ($7.2 billion). To offset the investment loss incurred by the Vision Fund unit, the group mitigated the impact by reducing its stake in Alibaba Group Holding Ltd through selling.

By the end of March, the portfolio of Vision Fund 2 was valued at $31 billion, which is lower than its acquisition cost of $49.9 billion.

SoftBank has significantly reduced its investment activities, and its CEO, Masayoshi Son, has withdrawn from public presentations in order to concentrate on the listing process of chip designer Arm.

Arm, headquartered in Cambridge, England, has submitted a confidential filing for a potential U.S. stock market listing, expected to take place later this year. This listing would bring much-needed financial support to SoftBank. 

According to a source familiar with the matter, Intel is currently in discussions with Arm to become a key investor in the chip designer's initial public offering (IPO). This news contributed to a 5% increase in SoftBank's shares during Tuesday morning trading. 

While SoftBank has been pursuing a defensive strategy to strengthen its financial position, the conglomerate announced in May its intention to strike a balance between defensive and offensive moves, implying a potential increase in future investments.