IBM layoffs, is it the smart thing to do, is it moral?

IBM Corp. plans to lay off 5,000 U.S. employees in a new round of job cuts, that represents 4% of IBM's U.S. workforce.

And it is reported that those jobs are shifting to India.

"In an effort to re-balance skills, eliminate redundancies, and deliver greater economic efficiencies, IBM Global Business Services is announcing a resource action affecting US employees in Application Services," says an IBM document dated March 26th.

And IBM is not alone in this, Agilent Technologies said Thursday that it plans to lay off 2,700 staffers while Microsoft earlier this year announced 5,000 layoffs.

IBM U.S. workforce is down from 115,000 workers in 2008 to 127,000 in 2006. The company now employs more than 70,000 workers in India.

However IBM is also seeking contracts in those countries. For example IBM signed a $600 million contract with Vodafone for wireless services in India.

So is this a smart thing for IBM to be doing?

For their shareholders, yes, for us, no.

If this economic meltdown has not yet sunk in for everyone, it should now.

A new economy is coming but how does that help you?

It doesn't unless you take action and stop relying on your employer to take care of you, because they will not.

Is it the moral thing to do?

Well, as long as IBM maintains a U.S. workforce that is relative in size to sales in the U.S. verses other markets then I say it is ok.

The extreme is if they move 100% of their workforce to India and yet 80% of their sales are in the U.S. then I say no.

A capitalist may argue about efficiency and other drivel, but in the big picture if every company followed suit then the U.S. economy would tank and they would have zero sales here.

If you are a U.S. company and you sell in the U.S. market then you had better also have an adequate workforce here.

Some may argue that this is protectionism.

I argue that it is common sense.