Samsung expects its profits for the last three months of 2022 will drop by 69%, to their lowest level in eight years. The biggest maker of memory chips, smartphones, and TVs in the world said that its operating profit for the period would drop to about 4.3 trillion won ($3.4 billion; £2.8 billion).
It comes as the price of memory chips and the demand for electronic gadgets fall because the world economy is slowing down. In the past few months, consumers have been cutting back on spending, which has hurt tech giants all over the world.
It was Samsung‘s lowest quarterly profit since 2014, and investors had expected around 5.9 trillion won.
The South Korean company said that the number of orders for computer chips fell more than expected because customers were getting rid of their stock of these important parts for digital devices. “For the memory business, the drop in demand in the fourth quarter was bigger than expected because customers changed their stockpiles to save more money,” Samsung said in a statement.
“Demand for smartphones has been low because of long-lasting macro issues,” the report said. On January 31, Samsung plans to release its full financial report.
It’s the latest big tech company to talk about how the weak global economy is hurting its business. After the pandemic, when people at home spent a lot of money online, sales have also slowed down.
Tens of thousands of jobs are being lost in the technology industry around the world because sales are slowing and people are getting more worried about an economic downturn.
Amazon said this week that it would cut more than 18,000 jobs, which would be the most jobs in the company’s history, in order to save money.
Meta said in November that it would lay off 13% of its staff.
The first mass layoffs in the history of the social media company will cause 11,000 of its 87,000 employees around the world to lose their jobs.
Mark Zuckerberg, the CEO of Meta, said that the cuts were “the hardest changes we’ve ever made in the history of Meta.”
The news came after Twitter fired a lot of people. When billionaire Elon Musk took over the company in October, about half of the staff was let go.
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Jessa Martin is the author of Nogmagazine, A professional in writing by day, and novelist by night, she received her bachelor of arts in film from Howard University and her master of arts in media studies from the New School. A Brooklyn native, she is a lover of naps, cookie dough, and beaches, currently residing in the borough she loves, most likely multitasking.