After a huge loss on his tech bets, SoftBank CEO Masayoshi Son had no choice but to make tough decisions to stop the bleeding, including company-wide cost-cutting measures and layoffs.
According to a person familiar with the matter, SoftBank is cutting around 150 staff at its Vision Fund unit and SoftBank Group International. The person told Reuters that SoftBank also sent notices to employees on Thursday, but they did not reveal how the information was not public. Nearly 30% of the employees will be affected by the layoff. The US, Britain and China are affected by the major cost centers, according to the person.
Softbank's Vision Fund reported a loss of 2.93 trillion Japanese yen $21.68 billion during the quarter that ended in June. The loss follows a record 2.2 trillion yen loss in the previous quarter. SoftBank also reported an 820 billion yen foreign exchange loss due to the weaker Japanese Yen. Son pledged to cut costs after the Vision Fund reported a record $50 billion loss in the six months through June.
In August, SoftBank founder and CEO Masayoshi Son said that the loss is the biggest in our corporate history and we take it very seriously. Son said there are too many to count when asked about what he learned from the experience. Son said we need to cut costs with no sacred areas. SoftBank's Vision Fund was founded in 2017 and invests in tech startups and high-growth companies. The shares of its portfolio companies ranging from South Korean e-commerce firm Coupang to DoorDash were hit hard in the second quarter of the year.
Son said back in May that the company would go into defense mode and be more conservative with the pace of investments after posting a record 3.5 trillion Japanese yen loss at the investment unit for the last fiscal year. Son plans to cut staff at the Vision Fund, but he said there was no sacred areas. SoftBank was founded in 1981 by Masayoshi Son in September and is a multinational telecommunications and internet corporation based in Tokyo, Japan. Its main focus is on broadband, fixed-line telecommunications, e-commerce, internet, technology services, finance, media and marketing, and other businesses. Softbank is the sixth-largest phone operating company with total revenue of $74.7 billion. The company has invested in a lot of startups, including Uber.
Softbank Vision Fund holds stakes in the following companies: Arm Holdings, Fortress Investment Group, Boston Dynamics, Sprint 85% Alibaba 29.5% Yahoo Japan 48.17% Brightstar 87.1% Uber 15% Didi Chuxing ca. 30% of Renren 42.9% InMobi 45% Hike 25.8% Snapdeal ca. 50% of Paytm is ca. 20% OYO 42% Ping An Insurance 7.41% 6 Slack Technologies ca. 5% of WeWork is ca. 80% ZhongAn Online P&C Insurance 5% Compass ca. 22% AUTO 1 Group ca. 20% Wag 45% of Katerra ca. 28% Cruise Automation ca. 19.6% ParkJockey 7 Tokopedia Indonesia and many more.