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UK Barclay Brothers Co To Close India Call Center In Feb
DOW JONES NEWSWIRES
NEW DELHI -- Shop Direct Group Ltd, a mail-order firm owned by Britain's wealthy Barclay brothers, plans to close its India call center in February and repatriate jobs to the U.K.
While the closure follows what the company says was a two-year trial to handle customer calls, labor unions and outsourcing experts in the U.K. believe the 250-seat call center in the software hub of Bangalore was shuttered due to complaints over Indian accents, which some customers found hard to understand.
"The contract with our Indian partner will be terminated on February 16," said Shop Direct spokesman David Boardman. "This was only a trial and we have decided to wind up the overseas operation following peak Christmas trading activity."
Shop Direct's call center is believed to have been among the first foreign companies to establish outsourcing operations in India. Over the past two years, the sector has enjoyed a remarkable boom, booking revenues of $2 billion in 2003.
Unlisted Shop Direct is a unit of March U.K. Ltd, controlled by David and Frederick Barclay. Earlier this month, the brothers gained control of Hollinger Inc. (T.HLG), the holding company of Canadian magnate Conrad Black's newspaper interests.
Shop Direct's Boardman said 250 jobs would be lost in India and some positions would be added to the company's seven call center locations in the Midlands. He declined to say why the Manchester-based company closed the Bangalore operation, which took calls from U.K. customers placing orders from its mail-order catalogue.
Shop Direct's withdrawal follows U.S. computer major Dell Inc. (DELL) and Wall Street bank Lehman Brothers Holdings Inc. (LEH) recently closing parts of their outsourcing operations due to problems understanding Indian accents as well as customer complaints over long delays in answering calls and poor service.
On both sides of the Atlantic, this has been music to the ears of labor unions representing service sectors that have suffered heavy job losses from India's outsourcing boom.
"Outsourcing has yielded only short term monetary gains but quality suffered. The withdrawal shows that in the long run outsourcing doesn't pay," said a spokesman for Manchester-based Union of Shop, Distributive and Allied Workers, or Usdaw, which represents 10,000 Shop Direct employees. "This is a clear admission by the company that the experiment has failed to yield the
desired result." The U.K.'s National Outsourcing Association, or NOA, which
represents 500 companies with global outsourcing operations, believes the
inability of Shop Direct's customers to understand Indian accents may have
forced the company to review its outsourcing strategy.
"The Indian accent could be a problem with some customers," said NOA director Nigel Roxburgh. "This could well become a trend. Indian call centers can't afford to rest on their laurels."
-By Ashok Bhattacharjee, Dow Jones Newswires; 91-11-2307-4020;
Ashok.Bhattacharjee@Dowjones.com
-Edited by Alastair McIndoe
Updated January 29, 2004 1:02 a.m. |
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