Many US companies have become global players. The technology giant IBM employs over 465,000 people and has revenues of roughly $100 billion. Although IBM’s headquarters is in Armonk, New York, the vast majority of its employees (more than 70 percent) actually work outside the United States. IBM, like many other US-based multinationals, now earns the majority of its revenues (roughly two-thirds) outside the United States[1]. IBM’s revenues in the BRIC countries have been growing at between 20 and 40 percent per year, while they have grown by only about 1 to 3 percent in developed markets such as the United States. IBM’s goal is to obtain 35 percent of its total revenue from fast-growing emerging economies such as the BRIC countries by 2015. To capture these opportunities, IBM (along with many other multinational companies) has been reducing the US headcount while increasing employment in emerging economies such as India.
Is there any special consideration a firm should have for its “home country”? Is it ethical to lay off workers in the US while hiring overseas? What about keeping profits outside the US in offshore accounts to avoid paying corporate taxes?