SoftBank Group Plans New Round of Layoffs at Vision Fund

SoftBank Group Corp, the Japanese conglomerate known for its aggressive investments in tech companies, is planning a fresh round of layoffs at its Vision Fund investment arm, as reported by Reuters. This move is part of SoftBank's ongoing cost-cutting measures.

The layoffs, which could be announced within the next two weeks, may affect up to 30% of the unit's staff, including employees in the United States.

At the end of March, SoftBank's Vision Fund unit had a headcount of 349, as stated in the company's report. The sources, who requested anonymity due to the confidential nature of the information, revealed that the layoffs are expected to be substantial. SoftBank Group Corp (9984.T) has yet to comment on the news.

This potential round of layoffs follows the elimination of approximately 150 jobs globally at SoftBank's investing arm and SoftBank Group International back in September. The conglomerate has been facing challenges as the valuations of its portfolio companies have declined amidst rising U.S.-China tensions and significant interest rate hikes.

In an effort to mitigate investment losses, SoftBank has taken measures such as selling down its stake in Alibaba Group Holding Ltd (9988.HK). However, despite these actions, the Vision Fund unit still experienced heavy losses. The portfolio of SoftBank's Vision Fund 2 was valued at $31 billion at the end of March, considerably lower than its acquisition cost of $49.9 billion.

SoftBank's approach to investing has undergone a significant shift, with the company drastically scaling back its investing activity. Additionally, SoftBank Group Corp's CEO, Masayoshi Son, has withdrawn from public presentations to focus on the upcoming listing of chip designer Arm. Based in Cambridge, England, Arm has confidentially filed for a U.S. stock market listing, expected to take place later this year. This listing 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 sparked investor optimism, leading to 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 conglomerate stated in May that it intends to find a "balance between defense and offense," hinting at potential future investments. SoftBank's future actions will be closely watched as it navigates the challenges of a changing investment landscape.

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