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Samsung Next will shut down its operations in IsraelÌýand shift its activities abroad, as the Israeli economy suffers a downturn due to the ongoing war on Gaza.

The firm, which is the innovation branch of Korean company Samsung, announced to staff it was closing its operations in Tel Aviv, a regional tech hub.

An email to office employees said: "[T]his decision, although difficult, does not diminish the achievements we have accomplished together for almost a decade", including investing in 70 companies and Israeli startups,Ìýaccording to Israeli tech publication CTech.

The US office, which will be taking over regional clients and investments in a process the company expects to occur by autumn, would provide resources and advice to the team, the email added.

It comes after a flurry of difficulties for the Israeli economy since the 7 October attacks and war on Gaza, including in the tech sector.

The Boycott, Divestment, Sanctions (BDS) movement , which calls for an embargo on Israel due to rights concerns, said the move was "yet another strong indicator of the dramatically declining confidence in the Israeli economy".

Prior to Israel's war on Gaza, the IMF warned that controversial judicial reforms, which members of the Israeli tech sector protested,Ìýcould negatively affect the country's economic growth.

Warnings over Israel's growth have persisted since the start of its war on Gaza, with the economy contracting by almost 20 percent in annualised terms in the last quarter of 2023.

In January, the Central Bank cut interest rates in a bid to support both businesses and households through the war.

Credit ratings agency Fitch Ratings said that while Israel's "rating watch negative" status had been removed, it still held a negative ratings outlook on the country.

This "reflects the combination of uncertainties around the fiscal trajectory and the war's duration and intensity, including the risk of regional escalation", the firm clarified.Ìý

Israel's tourism industry has also been affected by the war.