SoftBank Group Set to Implement New Round of Layoffs at Vision Fund

According to a report by Reuters, SoftBank Group Corp is planning a new round of layoffs at its Vision Fund investment arm as part of its ongoing cost-cutting measures. The layoffs, which could be announced within the next two weeks, are expected to affect up to 30% of the unit’s staff, including employees in the United States.

As of the end of March, the Vision Fund unit had a headcount of 349, as disclosed in the company’s report. Anonymous sources familiar with the matter stated that the layoffs are anticipated to be substantial, though SoftBank Group Corp (9984.T) has not yet commented on the news.

This potential round of layoffs follows a previous round in September, where approximately 150 jobs were eliminated globally at SoftBank’s investing arm and SoftBank Group International. SoftBank has faced challenges as the valuations of its portfolio companies declined due to factors such as rising U.S.-China tensions and significant interest rate hikes.

To mitigate investment losses, SoftBank has taken actions like selling down its stake in Alibaba Group Holding Ltd (9988.HK). However, the Vision Fund unit still incurred substantial losses. The portfolio of SoftBank’s Vision Fund 2 was valued at $31 billion at the end of March, significantly below its acquisition cost of $49.9 billion.

SoftBank has scaled back its investing activity and its CEO, Masayoshi Son, has withdrawn from public presentations to focus on the upcoming listing of chip designer Arm. Arm, based in Cambridge, England, has confidentially filed for a U.S. stock market listing expected later this year, which could provide SoftBank with a much-needed cash injection.

In related news, Intel (INTC.O) is reportedly in discussions with Arm to become an anchor investor in the chip designer’s IPO. These developments have led to investor optimism, resulting in a 5% increase in SoftBank’s shares during Tuesday morning trade.

While SoftBank has primarily adopted a defensive strategy to strengthen its balance sheet, the company stated in May its intention to find a “balance between defense and offense,” hinting at potential future investments. The market will closely monitor SoftBank’s future actions as it navigates the challenges of a changing investment landscape.

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