Samsung anticipates a 69% drop in profits for the last three months of 2022, the lowest level in eight years.
The world’s largest manufacturer of memory chips, smartphones, and televisions expects its operating profit for the period to be around 4.3 trillion won ($3.4 billion; £2.8 billion).
It comes as the global economic slowdown has a negative impact on memory chip prices and demand for electronic devices.
As consumers tighten their belts, technology behemoths around the world have taken a hit in recent months.
Samsung’s quarterly profit was the lowest since 2014, and it fell short of investor expectations of around 5.9 trillion won.
Amazon will lay off 18,000 workers in order to cut costs.
Samsung warns of a 32% drop in profits due to the chip slump.
The South Korean firm reported a larger-than-expected drop in demand for computer chips as customers reduced their stocks of the critical components for digital devices.
“The decline in fourth-quarter demand for the memory business was greater than expected as customers adjusted inventories in their effort to further tighten finances,” Samsung said in a statement.
“Smartphone sales and revenue decreased as a result of weak demand caused by prolonged macro issues,” it added.
On January 31, Samsung will release its full financial statement.
It is the latest major technology company to reveal how the global economic downturn is affecting its operations.
Sales have also slowed after a surge in demand during the pandemic, when customers at home spent a lot of money online.
Tens of thousands of jobs are being lost in the global technology industry as sales slow and fears of an economic downturn grow.
Amazon announced this week that it would cut more than 18,000 jobs, the most in the company’s history, in order to cut costs.
Meta announced in November that it would lay off 13% of its workforce.
The first mass layoffs in the company’s history will result in the layoff of 11,000 employees from a global workforce of 87,000.
Meta chief executive Mark Zuckerberg said the cuts were “the most difficult changes we’ve made in Meta’s history”.
The announcement followed major layoffs at Twitter, which cut roughly half of its workforce after multibillionaire Elon Musk took control of the company in October.
