SoftBank Begins Intensive Restructuring Amid 52 Trillion Won Deficit

Japanese SoftBank is initiating high-intensity restructuring measures, including workforce reductions, in its Vision Fund division, which has been experiencing massive investment losses.

On the 13th (local time), major foreign media outlets reported, citing sources, that SoftBank is considering adjusting 30% of the entire workforce in the Vision Fund division as part of cost-cutting efforts.

The layoffs could affect about 30% of the total employees, including overseas staff in the U.S. and other regions, and are expected to be announced within two weeks, sources said. As of the end of Q1 this year, the Vision Fund division had a global workforce of 349 employees, and approximately 105 employees are expected to be laid off in this round of cuts.

Foreign media reported, "SoftBank Group has started a second round of layoffs nine months after cutting 150 jobs in its investment division and SoftBank International last September."

[Image source=Reuters Yonhap News]

SoftBank, which has aggressively invested in tech stocks such as China's ByteDance and Alibaba, has continued to post losses as the value of its portfolio companies plummeted due to the ongoing high-intensity tightening since last year and the shockwaves from U.S.-China tensions.

As a result, SoftBank's Vision Fund recorded its largest-ever annual net loss last year. SoftBank announced on the 11th of last month that the Vision Fund posted a net loss of 5.3223 trillion yen (approximately 52.45 trillion KRW) for the 2022 fiscal year (April last year to March this year). This figure is significantly higher compared to the previous year's loss of 362.6 billion yen and represents the largest loss since the Vision Fund's establishment.

With central banks worldwide continuing tightening policies to control inflation, it seems unlikely that SoftBank will resume aggressive investments soon. CFO Yoshimitsu Goto said during the earnings announcement, "We are deeply concerned about geopolitical risks," adding, "It is difficult to resume investments for the time being." In Q1 this year, the combined investments from Vision Fund 1 and 2 amounted to only $400 million (approximately 530 billion KRW).

SoftBank Chairman Masayoshi Son has recently been scaling back investment activities and focusing on the initial public offering (IPO) process for ARM's listing on the U.S. Nasdaq. ARM, a UK-based semiconductor design (fabless) company and SoftBank subsidiary, recently selected Goldman Sachs, JP Morgan, and Barclays as joint lead underwriters and is proceeding with IPO procedures such as filing for listing review.

Meanwhile, foreign media reported that U.S. semiconductor company Intel is negotiating with SoftBank to become a key investor in ARM's IPO. The market expects ARM to raise between $8 billion and $10 billion through this Nasdaq listing.

This content was produced with the assistance of AI translation services.