SoftBank Vision Fund said to cut 10% of workforce

After posting a US$17.7 billion loss on the valuation of its portfolio companies, SoftBank’s Vision Fund is planning staff cuts that could affect 10% of its workforce of about 500 employees, Bloomberg reported, citing people familiar with the matter.

A SoftBank store in Japan / Photo credit: Wikipedia

According to one source, the cuts will affect all staff levels. Vision Fund, which is headquartered in London, also operates in Tokyo and California.

The company declined to comment on the issue, according to Bloomberg.

So far, the US$100 billion Vision Fund has invested in more than 80 companies that are worth nearly US$70 billion. For full-year 2019, SoftBank lost almost US$10 billion from its investments in Uber and WeWork alone.

The fund has been struggling since WeWork shelved its initial public offering, which prompted SoftBank to offer a US$9.5 billion package to rescue the US-based co-working startup.

Meanwhile, Uber recently announced that it would shut down 45 offices globally and lay off 3,000 more employees, as it’s seen an 80% drop in its ride-hailing business during the Covid-19 pandemic. Oyo, SoftBank’s biggest bet in India, also saw an up to 60% drop in revenue and occupancy rate.

“It makes sense that SoftBank is cutting positions at the Vision Fund as they are in an extremely difficult situation, and they may start targeting highly paid workers to cut costs,” Koji Hirai, the head of M&A advisory firm Kachitas Corp, was quoted as saying in the Bloomberg report.

In the company’s latest earnings call, SoftBank founder Masayoshi Son warned that 15 of its portfolio companies might go bankrupt, while some may make it to the other side.

But given the first Vision Fund’s performance, SoftBank has been struggling to raise money for Vision Fund 2, securing just US$2 billion in its initial close last year. The company was aiming for a starting size of US$108 billion for the second mega fund.