The popular IT company Tech Mahindra has reduced the retirement age from 58 to 55 years. Generally, corporate and government retirement ages go up but in the rapidly changing IT industry, it’s beginning to go down.
This move by the company indicates that they don’t want to be stuck with older employees who may be reluctant to change. The policy applies only to employees in what it calls the ‘U’ band — those with under seven years of experience. The policy has no impact for now, and its senior employees will not be hit.
“At the end of the day, business-and-skill mix required has changed dramatically. Companies have engaged their employees in long learning cycles — in some cases, at their own expense. Firms have little control and are driven by clients’ demand and are actively changing the skill mix. With customers wanting to reap higher productivity gains, the project pyramid is getting squeezed, forcing companies to rationalise costs and embark on redundancy plans without the noise,” said an industry source.
Across the tech industry, the dramatic technology changes are compelling companies to find ways to show older employees, and less agile employees the door.