SOFTBANK Group’s Vision Fund is preparing to start another round of layoffs as soon as this week, following an approximate 30 per cent reduction last fiscal year, according to people familiar with the matter.

About 13 per cent of the Vision Fund staff will be affected, one person said. The headcount reduction will mostly occur in the US, another person said, asking not to be identified as discussions are private. The investment unit had about 349 people globally as of end-March.  

A Vision Fund spokesperson declined to comment. SoftBank shares fell as much as 1.8 per cent in early morning trade in Tokyo on Thursday (Jun 22), paring gains made earlier this week.

The cuts follow five straight quarters of losses at the Vision Fund, reflecting the tough environment for technology investment. Global startup valuations have tanked, hurt by heightened caution around loss-making firms as rising interest rates, widespread economic malaise and the collapse of Silicon Valley Bank sap liquidity.

It’s unclear how deep the cuts will be in the end. Reuters earlier reported layoffs could affect 30 per cent of the fund’s staff. SoftBank last year reduced the number of its Vision Fund by about 30 per cent from about 500 people as the investor drastically cut back on the number of startup investments.

The gargantuan investment fund that Masayoshi Son proudly set up in 2017 lost a record 4.3 trillion yen (S$40.7 billion) for the full fiscal year that ended in March. The losses came despite a rebound in tech stocks in the latter part of the year as the Vision Fund continued to mark down a number of its private holdings.

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SoftBank and Son have thrown their weight behind the imminent IPO of Arm, a British chip designer among several major tech firms expected benefit from the rollout of artificial intelligence. Arm is expected to raise at least US$10 billion in one of the year’s most anticipated debuts, potentially vindicating Son’s years-long proselytization of AI.

Son, who had shunned the public eye for seven months, returned to the stage this week to address SoftBank shareholders and acknowledge he had made mistakes in the past through bad investments. But he appeased enthusiasts by saying SoftBank plans to go back on the offensive in investing soon, seeking to establish his credentials in the burgeoning field of AI.

When he was questioned by a shareholder about how SoftBank plans to cope with continued losses at the Vision Fund, Son, who survived the dot-com bust, brushed off the concern.

“That’s a tough question. But a gain or loss of like 2 trillion yen, 3 trillion yen is within the margin of error,” Son said. “I know this may not be the way to address this for shareholders, but that’s how I think of it at the bottom of my heart. So I’m just being frank.” BLOOMBERG