Iconic Irish company Waterford Crystal (WATFF) will lay off most of its workforce and shift production elsewhere, having already contracted most of its production to Slovenia.

At its height in 2002, Waterford employed 3,200 people, but that number will soon drop to approximately 125.

The company's plant will remain in Dublin, though it will become primarily a tourist attraction, rather than a manufacturing plant. Waterford, which manufactures the ball dropped each New Year's Eve in Times Square, draws about 300,000 tourists each year.

The decline of the dollar is partially to blame, as about half of the company's revenue comes from American consumers. Also to blame are the living wages paid Western European workers; Eastern European laborers can produce high-quality goods for far less pay.

Much as the newly-unemployed workers dislike being jobless, investors seem to like the new direction, bidding Waterford stock up 50% to 0.3 euro cents. (The company's market cap remains less than a tenth of its debt.)

A union representative had this to say: "That [employees] will now seemingly be cast aside and production moved to just another factory overseas is devastating."

Outsourcing is already de rigueur here in America, as companies from Procter & Gamble (PG) to DuPont (DD) to Cisco Systems (CSCO) have sent jobs overseas. Atul Vashistha, CEO of outsourcing consultant neoIT and co-author of the book The Offshore Nation, told BusinessWeek: "Many CEOs are saying, 'Don't tell me how much I can save. Show me how we can grow by 40% without increasing our capacity in the U.S."

Eli Lilly (LLY) is a good example. For each new drug it releases, it estimates the cost to be somewhere around a billion dollars. However, according to the same BusinessWeek article, outsourcing lowers those costs to about $800 million. Lilly now does 20% of its chemistry work in China at a 75% savings; it's also trying to cut costs on clinical trials by conducting them in Brazil, Russia, China and India. When most people think of outsourcing in this country, they think of India. General Electric's (GE ) John F. Welch Technology Center -- named for their famed ex-CEO -- isn't located anywhere near GE's headquarters in Fairfield, Connecticut. It's in Bangalore, India.

A quarter of the Welch center's engineers have Ph.Ds. They design turbine-engine blades for jet aircraft; they study the molecular structure of materials used in short-term-use DVDs, which automatically erase after a certain period of time. Workers at the center have filed for 95 US patents since 2000.

Morgan Stanley (MS), JPMorgan (JPM), and Goldman Sachs (GS) employ Indian analysts and back-office workers. (Though someone working in Madras may be better-described as back-back-back office.)

But something interesting is now happening: India is outsourcing outsourcing.

To Mexico, because Indian workers are just too expensive these days.

Tata Consultancy Services (TCS) opened a software development center in Guadalajara, providing about 5,000 jobs to Mexicans over the next 5 years.

New Delhi-based IT firm Genpact (G), self-described as "a world-class" alternative to India for IT outsourcing, opened a 125,000-square-foot facility in Ciudad Juárez, employing 2,500 people.

Bangalore's Infosys (INFY) set up shop in Monterrey last year - 150 miles south of the United States border.

This is the new paradigm: A company in the United States pays an Indian vendor 7,000 miles away to supply it with Mexican engineers who work within driving distance of America.

It's what happens when a country's companies are trying to cope with wage inflation hovering around 15% annually.

So, the next time you boot up your PC, remember: the software you're using could well have been dreamt up by someone in San Jose, developed by someone in Matamoros, tweaked by someone in Mumbai, manufactured in Hermosillo... And if you need tech support? Expect it to come full circle to Bangalore.

Adios!