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Office holiday party pits money against morale

In this brutal season of cutbacks, the office holiday party is getting downsized, too.
/ Source: The Associated Press

In this brutal season of cutbacks, the office holiday party is getting downsized, too.

From American Express to MTV to the Bend, Ore., city government, employers are canceling Christmas celebrations because of the gloomy economy. At some other workplaces, last year's catered affair is this season's potluck.

"It's grim," said Daniel Briones, president of the National Association of Catering Executives and catering director at the Four Seasons Hotel Philadelphia. He called the drop-off in business the worst since 2001, when the holidays unfolded in the shadow of the Sept. 11 terrorist attacks.

For some companies, this is about appearances as much as money. No firm wants to be pilloried for plowing cash — in some cases, taxpayer dollars — into ice sculptures and raw bars while workers fear for their jobs and shareholders for their investments.

"Even if they can afford it, nobody wants to be seen as being profligate," said New York restaurant magnate Danny Meyer. He said some big financial firms have canceled big catered year-end parties, but there is new demand for smaller gatherings in his restaurants' back rooms.

Some workplace experts warn that canceling a party can sap morale. But some employees say they don't mind having a more modest celebration in tough times.

"You don't want to be eating your steak and thinking that it could have been in your wallet instead," said Eric Bolesh, 29, who works at a North Carolina business-consulting firm.

One in five companies is scuttling or scaling down its year-end bash, according to the workplace consulting firm Challenger, Gray & Christmas Inc. Surveys by the catering executives group and the trade magazine Special Events found a majority of event planners are losing at least 10 percent of their corporate holiday business.

Larry Weaver, a Durham, N.C., comedian and booking agent who specializes in corporate events, said cancellations are nearing an unprecedented 20 percent.

"It's been devastating," Weaver said, noting that some of the entertainers he represents earn the bulk of their income during the holiday season.

Finance, construction, media and other companies — not to mention governments that rely on them for tax revenue — say the somber financial outlook is forcing a no-frills holiday season.

"In the current economic environment, it really is a case of just being careful with our spending," said American Express spokeswoman Joanna Lambert. The credit-card giant, which recently announced plans to cut 10 percent of its 65,000 employees, has even canceled next year's party.

In Bend, a midsized city in the foothills of the Cascade Mountains, city officials called off their $20,000 employee holiday party amid three rounds of layoffs and other painful fallout from the real estate bust, spokesman Justin Finestone said.

At least one corporation is offering a yuletide trade-off: Employees at Viacom Inc., where quarterly profits have plunged 37 percent, will get two extra paid days off instead of invitations to chic parties hosted by such divisions as MTV and Paramount Pictures.

Other companies are substituting hors d'oeuvres for sit-down dinners, shortening party hours and limiting bar service to beer and wine, said Greg Jenkins, a partner in Bravo Productions, a catering firm in Long Beach, Calif. One client axed an 800-person holiday dinner; two others have whittled down their plans.

The reasons? "One is economics, and two is perception," he said.

John A. Challenger, chief executive of Challenger, Gray & Christmas, warned that paring down a party may make sense, but canceling it can prove damaging.

A year-end celebration can help workers get to know and trust one another in an era when turnover and telecommuting can make that difficult, he said.