Laid-off Silicon Valley workers are panic-selling their start-up shares as valuations plummet — here are 3 top tech stocks for 2023 that actually make money

Laid-off Silicon Valley workers are panic-selling their start-up shares as valuations plummet — here are 3 top tech stocks for 2023 that actually make money

The white-collar recession is well underway.

After nearly a decade of six-figure salaries, cushy jobs and extravagant office perks, Silicon Valley firms are finally cutting back. Nearly 90,000 tech workers were laid off in 2022 alone. This year isn’t off to a great start either. Amazon announced 18,000 job cuts on January 5th.

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And now, SEC filings show Microsoft is planning to lay off 10,000 employees by the end of the third quarter.

Things aren’t much better for those who have (so far) escaped the layoffs. Countless tech firms, private and public, have watched their valuation tumble over the past 12 months.

And now, the Financial Times reports that a number of panicked laid-off workers are “flooding secondary markets” with their shares of their former companies. Which means those valuations are likely to plunge even further.

Here’s what that might mean for your portfolio — and where you might want to turn.

Tech takes a tumble

Record-low interest rates over the past decade pushed more investors to seek out risky investments. Loss-making tech companies were, perhaps, the riskiest spot for this excess cash. Tech valuations soared since 2020, which allowed startups and tech giants to use their inflated stock as a way to retain talent.

Tech workers were paid excessive amounts of stock-based compensation. In fact, some companies like Snap and Pinterest paid up to 46% of their total compensation in the form of stock options. This boosted the total compensation of tech workers during the boom, but is now having the opposite effect as valuations plummet.

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The Invesco QQQ Trust (NASDAQ:QQQ) — a fund that tracks tech stocks — is down 22.7% over the past 12 months. Meanwhile, private companies have also seen their valuation plummet as much as 80%. Employees of these firms are rushing to cash out on secondary markets, according to a recent report by the Financial Times.

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