After suffering billions of dollars of losses on its investment in WeWork,

SoftBank Group Corp.

’s Vision Fund is scaling back its high-risk investing strategy and focusing more on improving corporate governance at portfolio companies, according to current and former executives at the fund.

Masayoshi Son,

SoftBank’s chairman and CEO who also runs the Vision Fund, has told staffers at the fund to push the companies in which it owns stakes to generate cash, these people said, a drastic shift from his earlier demands that they spend aggressively to drive sales growth. Vision Fund executives are scrutinizing some deals more closely, such as one for a company that designs robots to cook hamburgers.

Following three years of rapid, tumultuous growth, the fund is also focusing on improving corporate governance at portfolio companies and possibly looking to reduce staff by asking some weaker employees to leave.

In recent weeks, leaders of the fund’s investment teams have been asked to make lists of their weaker employees, possibly a prelude to small staff cuts, according to these people, who also say the fund has deliberately slowed hiring. Both moves are firsts for the fund. Roughly a dozen investment staff have left on their own since the spring of this year, many unhappy about what they see as a toxic culture with competing teams, inexperienced investment executives, and poor communication, as well as a risky incentive structure that, for some, made it less appealing to be at the fund, people familiar with the structure said.

A Vision Fund spokesman said the fund continues to hire new employees. “Addressing underperforming employees is a standard business practice and not staff cuts.”

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The strategy shift comes after the Vision Fund expanded to more than 100 investment staff since it launched three years ago and invested close to $85 billion in just three years. It owns stakes in some of the most high-profile startups globally including

Uber Technologies Inc.,

Oyo Hotels & Homes, an Indian hotel-booking company, and

Slack Technologies Inc.

While the fund has had some successes like investments in chip maker

Nvidia Corp.

and Indian e-commerce company Flipkart Pvt. Ltd., it has seen stakes in WeWork, Uber and

ZhongAn Online P&C Insurance Co.

decline. People familiar with the fund point to a number of other investments that may decline in value. These include car-leasing company Fair.com, which on Thursday laid off 40% of its staff saying it needs to find a path to profitability, and e-commerce startup Brandless Inc., where sales were down 54% in August versus the same month a year earlier, according to credit-card data analyzed by research firm Second Measure.

A Brandless spokesman said the company paused marketing over the summer while it moved to higher margin products.

SoftBank’s rescue of WeWork came as it is trying to raise a second Vision Fund that is bigger than the first. But while SoftBank said it had more than $100 billion committed from investors, most of the money for the fund appears to be coming from SoftBank and its employees.

The shift in investment strategy is a major change for Mr. Son, who has offered founders of startups more money than they ask for, pushing them to grab market share while showing little concern for losses, according to people familiar with the fund. A grow-at-all-costs strategy backfired for WeWork and hasn’t yet created big realized profits from the fund’s portfolio of over 80 investments, though that isn’t unusual for a fund just three years old.

Under the lower-risk strategy being imposed by Mr. Son, the fund already is being more careful about proposed deals it might otherwise have done quickly, say people familiar with its strategy. Mr. Son has recently asked for more information from his investment team before pulling the trigger on some deals, said one of these people, including a proposed investment in Creator, a San Francisco startup that designs a robot that cooks hamburgers.

A Creator spokeswoman declined to comment. A Vision Fund spokesman declined to comment on Creator.

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Many employees are frustrated that Mr. Son makes all investment decisions, and doesn’t communicate well with staff, say people familiar with the fund. These people said that the team structure has resulted in competing fiefs within the fund.

Partner David Thevenon, who resigned earlier this month, is the highest-ranking investment executive to leave the Vision Fund to date. Mr. Thevenon served on the boards of ride-sharing giants Didi Chuxing Technology Co. and GrabTaxi Holdings Pte., two of the Vision Fund’s biggest investments. People familiar with his tenure said he was sometimes undermined by other investors, causing frustrations. One person familiar with his tenure said his departure wasn’t a surprise, since he had been brought on by

Nikesh Arora,

a former Google colleague who left SoftBank in 2016.

Mr. Thevenon referred questions to a Vision Fund spokesman, who declined to comment on the departure and on other issues related to his tenure.

The team under Managing Partner

Jeff Housenbold,

which is the largest at the Vision Fund, has also seen the highest number of staff departures. He led a number of SoftBank’s high-profile deals in the U.S., some of which have come under scrutiny internally for their poor performance or questionable business strategy, say people familiar with the matter. These include Brandless and dog-walking company Wag Labs Inc. People familiar with the team say some employees who left Mr. Housenbold’s team were unhappy with his management style.

Wag’s Chief Executive,

Hilary Schneider,

said in a statement that the company is focused on improving the customer experience and its profit margins.

A SoftBank spokesman said that Mr. Housenbold is a top performer at the fund with successful investments including real-estate brokerage Compass, house-buying company Opendoor, and food delivery startup DoorDash Inc.

Some employees at the Vision Fund have also been unhappy about the fund’s unusual incentive structure, said people familiar with the structure. Instead of sharing a percentage of investment profits, as is common at investment funds, the Vision Fund lends money to employees to co-invest in the fund. A small portion of the loans would be recourse back to the employee, meaning that if the fund performed poorly, they would have to pay back SoftBank. Some employees were unhappy with the plan, including its 10-year vesting schedule and the fact that investments were marked at October 2018 valuations, which are higher than where the Vision Fund first invested in some cases, people familiar with the plan said. A Vision Fund spokesman declined to comment on the incentive program.

Investment staff receive traditional bonuses as well each year in the spring. A person familiar with the fund suggested that it could see more employee departures after next year’s bonuses are paid out.

Write to Rolfe Winkler at rolfe.winkler@wsj.com and Yoko Kubota at yoko.kubota@wsj.com

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