The investment arm that manages SoftBank’s $100bn Vision Fund is laying off 15 per cent of its 500 global staff after a disastrous stretch in which $18bn was wiped off the value of its technology bets.
The cuts at SoftBank Investment Advisers are set to begin this week and hit a wide range of functions within the unit, two people with direct knowledge of the matter said. The firings mark the first big round of cuts at SBIA since it was created in late 2016 to manage the London-headquartered Vision Fund.
The cuts are an attempt to refocus the unit, one of these people added, after SBIA added about 400 employees in the past three years. Along with the departures, two SBIA managing directors Akshay Naheta and Kentaro Matsui have been reassigned to roles at SoftBank, the parent company that oversees the Japanese group’s various divisions.
The lay-offs have taken place even as a rapid recovery in global stock markets since the end of March has meant that SoftBank’s shares have climbed by 99 per cent since they plummeted to a four-year low in mid-March. The gains have also lifted the valuation of some of the Vision Fund’s biggest publicly traded holdings, including the ride-hailing group Uber and the office-messaging application Slack.
The Vision Fund’s poor performance through the end of March helped to drag SoftBank to its largest annual loss on record. This prompted Masayoshi Son, the Japanese conglomerate’s founder, to confirm that his ambitions for a sequel fund had been severely curtailed.
“Is the funding for Vision Fund II OK? It’s not OK so we are using our own capital,” Mr Son told investors in April. “I am still optimistic that there will be other investors who would want to join if our performance improves.”
Despite the setbacks, SoftBank revealed last month that Rajeev Misra, the former Deutsche Bank trader who runs the Vision Fund from London, had his annual salary doubled to more than $15m in the year to March.
Beset by cultural problems, synonymous with rapid-fire decision making and armed with an unprecedented amount of capital, the Vision Fund under Mr Misra scaled its staff levels rapidly over the past four years.
In the process, it opened offices from Mumbai to Silicon Valley to source and service investments. Its senior ranks have been filled with several of Mr Misra’s former colleagues from Deutsche Bank, while many younger recruits have told the FT they joined to be part of a record-sized investment fund.
The Vision Fund has invested more than $80bn in around 90 technology groups, mostly private start-ups, in that time. SoftBank declined to comment on the job cuts which were first reported by Bloomberg.