A spokeswoman for the Indian firm, ICICI Onesource, refused to say whether Britain's Shop Direct had given any reason for canceling the outsourcing contract, which began in March 2002. The spokeswoman said that even as Shop Direct canceled the contract, it sent a certificate saying the work had been "extremely good."
Dow Jones Newswires reported Thursday that labor unions and outsourcing experts in Britain believe the Bangalore center lost the contract due to complaints over Indian accents, which some customers found hard to understand.
Shop Direct's spokesman in Britain told Dow Jones that the contract had been "only a trial, and we have decided to wind up the overseas operation following peak Christmas trading activity."
At least two major U.S. companies, computer maker Dell Inc. and Lehman Brothers Holdings Inc., also have taken back work outsourced to India, but Shop Direct's reversal involves more jobs.
Both Dell and Lehman Brothers said they were closing Indian outsourcing operations because of customer complaints about hard-to-understand accents and long delays in answering calls.
However, Dell has continued to hire in India to expand its back-office operations.
Indian companies earn $10 billion annually from outsourcing of software and back-office operations, but the drain of jobs from advanced nations has become a sensitive topic, especially in the high-tech industry. Several technology executives say outsourcing jobs to developing markets is essential for competitiveness.
Shop Direct is a unit of March U.K. Ltd., controlled by the Barclay brothers, David and Frederick, who are vying to gain control of Conrad Black's newspaper interests.