Christmas spending: The party's over

The Yuletide season is usually dominated by events involving staff, customers, food and copious amounts of drink, but this year...

The Yuletide season is usually dominated by events involving staff, customers, food and copious amounts of drink, but this year is going to be very different, as our party investigators found out

This Christmas, you can count yourself lucky if your boss will stand you an Orangina and a packet of crisps down the pub. Times are hard and the Christmas party season in 2001 will be one to remember as the year the boss did not stand the drinks, did not buy the dinner - did not do anything.

Of course there are exceptions. Microsoft says that its Christmas party for "full-time Microsoft employees and their partners only" will take place at an "undisclosed London location in mid-December".

Other companies will host their annual bash, but everyone has one eye over their shoulder watching the accountants, or the receivers, coming down the chimney. Santa and his sack full of staff presents and Christmas bonuses is nowhere to be seen. BT, for instance, is reportedly allowing a grand total of £10 per head allowance for its Christmas party extravaganza.

Restaurants and traditional Christmas venues report a fall-off in bookings, and even if they are holding a Christmas party, few businesses are putting on one grand event for all their staff. It is up to departmental heads to take their staff out for a more modest gathering. Last year saw hundreds of dot com staff drinking their way through venture capitalist supplied champagne. Some must have known the money would not last, but whether they did or not it was a bumper year for restaurants and hotels.

Entertainment companies are reporting that the sort of entertainment the IT industry is looking for is a cocktail party or a dinner party. "Companies seem to be going for smaller departmental parties, it is smaller than last year," reveals Melissa Friend of Awesome Events. "But we are still busy - private parties are going ahead."

Reputations for lavish parties, which unfortunately only a few participants can ever remember, are going to be missed this year as most of the great and good cancel Christmas because of the recession.

Ideal Hardware
Seamus Twohig, Ideal Hardware's volume relationship director, claims his company gives the best parties. In the past the company threw warehouse parties using its own premises and watched its directors strut their stuff as 'Legends of Rock'. Time has moved on. Now the dreaded departmental party is all that is on offer. "We used to have one big party, but now we are having smaller parties in different departments going out to different places. We are going to Break for the Border." Sadly, muses Twohig, management is now older than staff. "We all have four-year-old kids, and the staff want to go out raving. But there will be no 'bah humbug' with our party this year, although it would be wrong of me to say there has not been a tightening of belts."

This year, sobriety is all the rage. "We have had Christmas parties in the past, but we are not having one this year," says Mark Floisand, Adobe's marketing director. "We have had a five per cent restructure on a global basis, and although that is a relatively small number, and sets our business right for the next year, we decided it was not appropriate to let go and spend on a Christmas party." At the end of October, Adobe lowered its fourth quarter revenue targets from $320m (£229m) to $285m, and made 150 staff redundant worldwide. Adobe's chief executive Bruce Chinzen said that there had been "great weakening" in his business in the US and Japan over the past two months.

Floisand says valiantly that there are bright spots in the Adobe marketing universe. Windows XP, for instance and the full version of Adobe 5.0 allows users to create PDF documents by selecting from an integrated menu bar. "There is a lot of interest in XP and Office XP. We see this as a chance for reseller upgrade business," he says.

Mark Salter, iPlanet's northern European sales manager, claims software sales have become a lot tougher. Business customers will listen to a sales pitch, but only if the message is about saving money. "The thing that will save money at the moment is outsourcing human resources. Using the Internet to do that, cutting out the HR department and providing employee self-service terminals hooked into an application service provider, is a hot topic."

The official iPlanet Christmas party has been cancelled, says Salter, because like Adobe, iPlanet has made staff redundant. "We lost headcount in the UK and to have a Christmas party this year would have been inappropriate." The company is having a Christmas party at the Rock Garden in Covent Garden, but staff are having to pay for it themselves. Staff are at least allowed free entry to the night club.

If there is no obvious Christmas cheer at Adobe and iPlanet, there is even less at ICL. Still smarting from the decision to pull the company's public flotation in August 2000, the company is disappearing inside the Fujitsu mantle. On offer is the departmentalised Christmas party this year. "As there are 10,000 members of the ICL workforce in the UK, there is no specific ICL party. However within this all the divisions, offices and workgroups will be going out to celebrate at some point around Christmas," says an ICL spokesperson.

The expectation is that staff will go out for dinner, to a pub or restaurant, or go to the theatre. Although ICL hasn't suffered the large redundancies faced by other companies, it is conscious of the fact that it can look politically incorrect for a company to be spending money on partying when others have lost their jobs. "It is probably not in the right spirit in the current economic situation," says a spokesman.

Whether its own staff will enjoy their dinners is doubtful: nobody likes to see the end of their company name, and this will be the last Christmas when ICL staff can send out an ICL card - next year Christmas greetings will be from Fujitsu.

Corporate excess may be out, but staff morale is all-important, claims David Atherton, owner and managing director of Bolton-based Internet distributor Dabs. "You have to put on a party for everyone." All his 170 staff, who can each bring one other person, are invited to this year's party. The budget is £20,000 and the theme is 'Christmas'. Last year the company had a 70s theme and hired wigs and beads, which Atherton says everybody wore.

"I have the advantage that I don't have to justify myself to the same extent. I can throw a fantastic party for 400 people on £20,000." A free bar means a lot to some people, claims Atherton, unless they work in sales and marketing, where they are always being offered free beer or free wine by vendors. Atherton says he doesn't have to worry about trying to give an office party for salesmen earning £100,000 a year, a next to impossible task unless he was to fly them off to a foreign city for a surprise bash.

Dabs is one of the few companies prepared to state publicly that while the market is flat, its consumer-related business is on track. Consumers, according to Atherton, are still spending money. "Everything I hear about consumer land is that consumers have not bought into the fact that there is a recession yet. Business sales are different - it needs only one depressed chief executive to cut £10m worth of purchasing plans," he reveals. But business is tough nevertheless for Dabs: Atherton says it is making 1.5 per cent net profit at the moment, with gross profit running at 12.5 per cent. "We are working harder to get more market share because we are deliberately trying harder at the moment. I am getting a little rise in Christmas sales, but not as much as last year."

Landis ICT
Other companies that might have seemed vulnerable to a downturn insist they are doing fine. Landis ICT marketing manager Rob Kearney maintains he has "normal levels of business" in the company's Microsoft and Novell training operations. "We have a lot of established clients who you know are going to survive any recession. They look at the bigger picture and see that you don't stop training people just for short-term gain. If you do, it will harm you next year," he claims. Rather than visit the horses at Epsom racecourse, as the company did last year for its Christmas party, Landis is having its Christmas party at a hotel in Dorking.

Hardware supplier Toshiba, a natural candidate for a gloomy Christmas if all the reports of zero growth in global PC manufacture business are to be believed, says that its consumer business is ticking along nicely. Corporate business is still on the cards too. Steve Crawley, product marketing manager for the computer systems division, is waiting to hear whether Toshiba has won a two-month-old tender for 6,000 laptops and recently completed an invitation to tender for 4,000 laptops for a financial client.

Toshiba Christmas parties are always held in January, which could be a smart move depending on how you look at it. It either means the staff have got something to look forward to in the New Year, or it means that staff will be kept at their desks right up until Christmas Day.

Crawley will be crooning away this year at Toshiba's 50s theme party. There is certain predictability about Toshiba parties: last year was the 60s, the year before the 70s. Crawley says he does not play an instrument, thus sparing his staff the sound of any managerial musicality.

Equiinet staff will be forced to endure the appearance of managing director Bob Jones at a James Bond theme party at Blenheim Palace, near Oxford. According to his PR man, he resembles the bearded SPECTRE villain Ernst Stavro Blofeld, played by Max von Sidow, and will be slinking around the ballroom grinning inanely with white cat in hand. Equiinet's sleek and sexy image, says the PR man, justifies the Bond event.
"We had no Christmas party last year, which is pretty much indicative of Equiinet's time as part of German-owned DICA Technologies. Now we are master of our own destiny again, we'll be throwing a party that is worthy of the UK market leader in secure server appliances. It's been a challenging year and Equiinet's staff and their families deserve a great bash in grand surroundings," says Jones.

Digital Union
The James Bond theme has proved irresistible to another company, e-business specialist Digital Union. Staff are to be forced into white tuxedos and made to drink gallons of Vodka Martinis. Chief executive Patrick Lawton has gone one further than Bob Jones and says he will be arriving at Horsley Towers, a country manor in Surrey, driving an Aston Martin. He is claiming the James Bond role for himself. "As I'm getting married during December, this year's Christmas party will be my last weekend of freedom - oops, sorry I meant to say singledom - so I certainly intend to leave bachelorhood behind." Patrick 'Thriller' Lawton (his own description) says the poor staff will have to endure "other surprises" at the party.

Sun Microsystems
Sun Microsystems is another company not going for a huge bash this year. Its staff are also going out to dinner or to a bar for a buffet, music and drinks. "It's horses for courses," says a company spokesman. "There's no point in going clubbing if everyone is married and wants to be home by half-past ten. Our Manchester office is going out for dinner and the City office is going to a bar for a buffet."

There is a whip-round where those people who can afford to pay more do so. "What tends to happen is our sales director will make a contribution of £30 but someone from admin, £5, rather than everyone paying £27.50. People pay what they can afford."

Even those companies with something to celebrate aren't being too exuberant. AOL UK has had the best figures ever and it wants to celebrate that and reward its staff. So it's having a Christmas party at a hired venue with drinks, dinner and dancing. "We're not going over the top, there is a sensitivity to world events and we have to take that on board," says head of corporate events Rachel O'Neill. "We're still having a party, but it isn't as 'full-on' as it would have been in the past."

A good way of rewarding staff is giving them time off over the Christmas period to recover from Christmas party hangovers or to do their Christmas shopping. This is exactly what Strategix, a company that supplies distribution systems to businesses that buy and sell products, has done.

"What happened with the extra days was that after we completed the management buyout, we wanted to improve employee benefits," says Strategix chief executive Peter Lusty. "Everyone gets two extra days, Christmas Eve and New Year's Eve. It seemed a good idea all round. These days are never particularly productive and it lets people start the party earlier. It went down very well with staff." But he emphasises that the company's support services to customers are still covered. Strategix brought this brilliant idea in for 1999, so the staff have benefited for three years.

It is having a Christmas party, but in January when everyone has less to look forward to and nothing is happening. "We decided to break with tradition and have the event in January as it is dreary," says Lusty. He believes parties are a good opportunity for staff and their partners to meet and mingle in a good atmosphere. His party will have a band, a disco and a dinner.

The lack of parties means more morose, sober-looking staff sitting at their desks instead of nursing hangovers.

The Office of National Statistics reports that the winter quarter including Christmas is when the highest number of staff are absent. Companies have to take absences seriously. The best way round it is to do what Strategix did and give staff the time off, or coach staff to save holiday to take at this time.

It's no surprise that in a dreadful year that has seen horrific acts of violence, a war on terror begin and an economic downturn take many jobs, that Christmas has been affected. But whatever happens, the Queen will still speak to the nation come the afternoon on the big day and your family will drive you crazy. That should be more than enough to drive you to drink, even if you have to buy your own.

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