SAN FRANCISCO (Reuters) - The U.S. economy may have begun to recover in 2009, but holiday office parties are sinking even further into the dumps.
Fewer companies plan to break out the bubbly this season than in 2008, at the height of the global financial crisis, according to a survey from Challenger, Gray & Christmas Inc.
Only 62 percent of about 100 companies that responded to the survey were planning holiday parties this year, down from 77 percent a year ago and 90 percent in 2007, as recession-era cuts extended from benefits and profit-sharing to Santa hats and disc jockeys.
“For companies that have recently announced layoffs or other significant cost-cutting measures, such as wage freezes, it would be difficult to justify, let alone get in the mood for a holiday party,” said John Challenger, the firm’s chief executive officer.
Challenger said it sends out roughly 1,000 survey requests to human resource executives at a wide variety of U.S. companies. Each year, roughly 100 respond on the firm’s anonymous website.
Among companies that are going ahead with the festivities, 64 percent said they would spend the same amount as a year ago, and 28.5 percent are spending less.
Nearly two-thirds said they would do without a caterer, event planner or other outside service. That could mean an employee will be conscripted to set up the party — or that workers will have to help stock the refreshment table themselves.
Compare that with the heady days of late 2006, when 80 percent of companies planned holiday parties and nearly one in three planned to boost their budgets significantly.
This year’s dampened spirit comes as no surprise as companies cut more jobs and Americans try to save as much money as they can for fear of even worse days ahead.
Equifax credit bureau said earlier this month that new credit cards issued were down more than half from July 2008, and Americans’ savings rate rose to an estimated 3.71 percent in the third quarter.
Challenger also said employees who will get to party on the company dime this year should refrain from any drunken hijinks.
“Now is not the time to draw attention to oneself with embarrassing conduct at the holiday party,” he said, “particularly at a time when everyone’s job is at risk of being downsized.”
Editing by Michele Gershberg and Lisa Von Ahn