As corporate America scales back, workers at United States companies in China are less likely to lose their jobs than those in high-income countries. A report from Morgan Stanley Dean Witter concludes that the wave of corporate 'downsizing' in the US will have considerable implications for workers employed by US companies outside the US. 'America's global workforce is slowly but surely being reconfigured,' according to the report's authors, economists Joe Quinlan and Andrea Prochniak. 'Many US companies are in the process of laying off thousands of US and foreign workers. 'We believe that workers in the high-wage nations of Europe and Canada are most at risk, while the winners will be low-cost yet labour-efficient developing nations like China, Mexico, Brazil and India.' Recent examples of US companies downsizing their offshore operations include Xerox, which plans to scale back payrolls in Ireland, the Netherlands and France, the report said. 'Ford and General Motors, for instance, have announced worker lay-offs in both the US and the United Kingdom,' it said. The global nature of such cutbacks reflects the fact that corporate America's workforce extends well beyond the 50 states. By the end of the 1990s, US majority-owned foreign affiliates employed nearly seven million workers abroad. 'These workers are no more immune to a US recession and resultant company lay-offs than are their US counterparts,' the report said. 'If past trends are any indicator, high-wage developed nations like Canada and the UK are likely to feel the brunt of the cutbacks. 'By contrast, low-cost developing countries such as Mexico, China and India are likely to be at the receiving end of more production and manufacturing employment of US affiliates.' Between 1989 and 1998, developing nations' share of US foreign affiliate manufacturing employment rose from one third to 41 per cent. Despite the shift to low-wage nations, the manufacturing employment base of US affiliates remained anchored in the high-wage nations at the end of the 1990s. 'Change is coming, however,' the report said. 'The cyclical dynamics of a US recession and brutal profits squeeze, juxtaposed against the dynamics of the global marketplace, will only accelerate US affiliate employment trends of the past decade.' The US is in the midst of an economic slowdown after roughly 10 years of massive growth prompting an interest-rate cut.