Softbank Group’s Vision Fund is planning to lay-off as many as 80 employees or about 15% of its workforce as part of job cuts due to record losses that the company registered in the last fiscal year, according to a report in Bloomberg.
The company has around 500 employees. The Fund had planned to downsize the workforce by about 10% up until last month. A source told Bloomberg that the job cuts may be announced on Wednesday.
The Vision Fund business of Japan's SoftBank Group had recorded 1.9 trillion yen ($17.7 billion) loss last fiscal, driven by fall in fair values of Uber, WeWork and its three affiliates in the fourth quarter primarily due to COVID-19. The three affiliates of WeWork are --WeWork China, WeWork Asia, and WeWork Japan.
In the fourth quarter of the last fiscal alone, SoftBank Vision Fund recorded an investment loss of 1.1 trillion yen.
"The timing for the end of the COVID-19 pandemic is not clear, and thus it remains difficult to forecast the medium-term impact on the company's business and financial results," the company said.
"However, the Company's investment businesses, particularly SoftBank Vision Fund, have already been adversely affected, with SoftBank Vision Fund recording an investment loss of 1.1 yen trillion in the fourth quarter due to a decline in the fair values of its investments," it added.
For SoftBank Corp., the company expects no significant impact on telecommunication business at this point.
The Tokyo-based conglomerate, led by billionaire founder Masayoshi Son, posted an overall operating loss of around 13 billion USD last month, after writing down valuations of companies like WeWork and Uber Technologies Inc., the report says.
The Softbank stock plummeted earlier this year after its businesses were hit badly by the coronavirus pandemic.
Staff exits are also likely to happen at the parent company Softbank Group. About 30 employees of the 192-strong workforce at the Tokyo-headquartered business are looking for jobs elsewhere after having submitted their resumes to one of Japan’s recruitment agencies, sources told Bloomberg.
With IANS inputs