updated 9/25/2006 5:13:45 PM ET 2006-09-25T21:13:45

Yahoo Inc. plans to close its U.S. offices during the final week of the year, a cost-cutting measure that will require most of the Internet icon’s 10,500 workers to use their vacation time if they want to be paid for the time off.

It will mark the first time in Yahoo’s 11-year history that its U.S. employees have been required to burn up vacation time during the week between Christmas and New Year’s — a traditionally slow period for most businesses outside the retailing and hospitality industries.

“Taking a little time off during a work week when so many of our partners and advertisers are also closed is the prudent thing for Yahoo to do,” Libby Sartain, the company’s senior vice president for human resources, wrote in a Sept. 21 e-mail posted on Valleywag.com, an online site devoted to Silicon Valley gossip.

Contacted Monday, Yahoo spokeswoman Joanna Stevens confirmed the e-mail’s authenticity, as well as the company’s closure plans. “This will make sure everyone has time to recharge their batteries,” Stevens said.

The move also will help Yahoo save money by lowering its expenses for lighting and heating its offices. It will also enable the Sunnyvale-based company to reduce its liabilities for its employees’ accrued vacation.

Stevens described the projected savings as “minimal.”

Every little bit helps Yahoo right now because its online advertising growth has been tapering off, an unexpected development that prompted management to warn investors last week that the company’s revenue will fall slightly below analyst estimates.

That disappointment added to the anxieties that had already surrounded Yahoo as it scrambles to catch up to Google Inc. in the Internet’s lucrative search market while trying to fend off threats from other increasingly popular Web sites like News Corp.’s MySpace.com and YouTube.com.

Yahoo shares fell Monday on the Nasdaq Stock Market. The company’s stock price has slid by 35 percent so far this year.

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