The insurance giant has agreed to the core demand from Amicus MSF, which represents IT professionals, that it makes no compulsory redundancies at its Reading call centre until 2005.
Although Prudential still plans to have an operational centre in India by the end of 2004, it will be reliant on staff agreeing to voluntary redundancy packages or redeployment which could take several years.
A spokesman for IT union Amicus MSF said Prudential had "seen sense" and expressed hope that the redundancy agreement, which also extends to the 1,500 job cuts announced by Prudential last November, would signal "a new era".
"It sends a good signal to the rest of the financial services sector that cutting jobs to cut costs will not be acceptable to staff and they won't take it lying down," he said.
A Prudential spokesman said it had always hoped most of the redundancies would be made on a voluntary basis, and denied that the company had backed down.
He added that the agreement had resulted from "genuine give and take" on the ubject of redundancies.
Amicus MSF had threatened to mount a legal challenge against the company after claiming that the company had failed to undertake a proper consultation with the union before making its decision.