Samsung profits plunge as demand for gadgets slows

Samsung expects its profits for the last three months of 2022 to fall by 69% to the lowest level in eight years. The world's biggest maker of memory chips, smartphones and TVs forecast its operating profit for the period fell to around 4.3tn won ($3.4bn; £2.8bn)

It comes as the global economic slowdown hits memory chip prices and demand for electronic gadgets. Technology giants around the world have been hit in recent months as consumers tighten their belts. It was Samsung's lowest quarterly profit since 2014 and missed investor expectations of around 5.9 trillion won.

The South Korean company said it saw a bigger-than-expected fall in demand for computer chips as customers cut their stocks of the key components for digital devices. "For the memory business, the decline in fourth-quarter demand was greater than expected as customers adjusted inventories in their effort to further tighten finances," Samsung said in the statement.

"Smartphone sales and revenue decreased due to weak demand resulting from prolonged macro issues," it added.

Samsung is scheduled to publish its full financial statement on 31 January. It is the latest major technology company to reveal how weakness in the global economy is impacting its business.

Sales have also slowed after demand boomed during the pandemic when customers at home spent a lot online. Tens of thousands of jobs are being shed across the global technology industry, amid slowing sales and growing concerns about an economic downturn.

This week Amazon said it planned to axe more than 18,000 jobs, the largest number in the firm's history, as it cuts costs.

In November, Meta announced that it would cut 13% of its workforce. The first mass lay-offs in the social media firm's history will result in 11,000 employees, from a worldwide headcount of 87,000, losing their jobs.

Meta chief executive Mark Zuckerberg said the cuts were "the most difficult changes we've made in Meta's history". The news followed major layoffs at Twitter, which cut about half its staff after multi-billionaire Elon Musk took control of the firm in October.