SoftBank sheds 30% of Vision Fund staff as it seeks to cut costs

SoftBank has laid off 30 per cent of staff at its flagship Vision Funds as the Japanese investment group seeks to dramatically cut costs after suffering record quarterly losses in a severe market rout for tech.

The Japanese conglomerate started telling staff about forthcoming cuts on Thursday, with 150 people in the 500-strong Vision Fund unit set to lose their jobs, said people briefed on the decision.

The move had been widely discussed but the job cuts amounted to double the expected scale. It is not yet clear where the jobs will be shed, but the cuts are expected to affect employees at all the unit’s offices around the world.

Plunging technology valuations and a weak yen drove founder Masayoshi Son’s group into a record ¥3.1tn ($23bn) quarterly net loss in the three months to June. Recently he admitted he should have been more selective and told investors he was “ashamed” of himself “for being so elated by big profits in the past”.

Recently added in August that SoftBank would subject itself to a “dramatic” group-wide cost-cutting exercise after a ¥7tn investment gain at the two Vision Funds almost completely reversed over the past six months.

SoftBank’s Vision Funds, which focus on investing in cutting-edge tech companies, reported a combined loss of ¥2.3tn in the April to June period, following a then-record ¥2.2tn loss in the previous quarter. The company also suffered a $6bn foreign exchange loss because of the yen’s weakness against the dollar.

“If we had been a little more selective and invested properly, it would not have hurt as much,” Son said at the time.

The company’s shares are down 23 per cent over the past 12 months.

Two days after reporting its worst quarterly performance, SoftBank said it would post a gain of ¥4.6tn ($33.6bn) by selling shares in Alibaba, significantly reducing the stake on which Son built his name as one of the world’s most high-profile technology investors.

Yoshimitsu Goto, SoftBank’s chief financial officer, told the Financial Times the move was designed to reassure investors that the group’s financial position was secure.

The heavily indebted Japanese conglomerate is seeking a further cash injection from a listing of UK chip designer Arm next year.

Last has discussed the option of taking SoftBank private on several occasions over the past three years, according to people briefed on the discussions, but had always rejected the idea, in part because of pressure from the conglomerate’s biggest lenders, notably Mizuho.

Video: SoftBank: piecing the puzzle together | FT Movie

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