For Many Companies, the Party's Over : Economy: With the downturn and the events in the Middle East, firms are cutting back on the holiday celebrations.

By HERMAN WONG

Dec. 12, 1990 12 AM PT

TIMES STAFF WRITER

Call it what you want. A slowdown, a downturn or a slump. Even a recession.

Whatever ails America’s economy this holiday season, the toll is dismally clear: massive layoffs, faltering firms, tumbling retail sales, predictions of even more dire trends.

Obviously, for many companies, especially those connected to the economically battered construction industry in Orange County and other regions, it is not business as usual this holiday seasons, a bleakness compounded by the anxieties stemming from the Persian Gulf confrontation.

Consider one more spinoff trend of this spreading economic malaise: This season’s corporate-hosted employee parties are being cut back drastically by many major firms. It seems a lot of conspicuous glitz and top-of-the-line celebrating are on hold.

Some firms have canceled employee parties, except for a few speeches and thank-you’s at brief in-office gatherings, according to local party planners and caterers. Mostly, though, firms are downscaling the events. These annual events, usually held at hotels or in company headquarters, are based on tighter budgets than in the past, planners said.

“A lot of companies are downplaying the scale, being more conservative this year. It’s basic foods now, not imported seafoods. It’s disc jockeys or CD players, not live bands,” said party planner Hillary Harris of the Newport Beach-based catering service, Cuisine/Cuisine Etc.

Added planner Alan Greeley of Golden Truffle Catering in Costa Mesa: “Even if these firms can afford putting on (big employee) parties, they’re still cutting back. They don’t want to appear lavish. It’s the image factor.”

Apparently, the William Lyon Co. falls into this category. The Newport Beach-based company, the nation’s leader in new home sales, canceled this year’s usual hotel dinner-dance for a simpler in-office buffet.

“We’re still doing our annual employee donation drive (for the Orangewood Children’s Home),” explained Lyon Senior Vice President Richard Sherman.

“But when it came to doing a big employee party again, we felt it would not be the sensible and appropriate thing to do, not now. Not with the (economic) downturn and what’s happening with Iraq.”

The image of company parties--as much a holiday institution for Yuletide ho-ho-ho as it is for nurturing employee togetherness--has been changing for years.

The wilder aspects of the image has been tamed. Party planners maintained that the old notoriety of hard drinking and high spirits--the stereotypical, legendary side of the office party--is no longer prevalent.

Consumption of alcohol at such parties is far more moderate, a reflection, planners said, of the anti-drunk-driving campaigns in the past decade.

And many such parties have become more familial, folksy and aimed at charitable causes. Parties welcoming employees’ spouses and children are as common as parties tied to charitable food and toy drives.

Subdued or not, the larger corporate employee parties stayed at a conspicuous level of lavishness through the mid-1980s, when the economic mood was one of prosperity.

It was not unusual for the bigger companies to invite hundreds, or in some cases more than a thousand guests, to elaborate festivities at hotel ballrooms, country clubs, banquet halls and mansions. Or gathered on grand yachts or under vast outdoor tents.

In Orange County, the most dazzling events cost well over a $100,000 apiece, according to one longtime party planner, Golden Truffle’s Greeley. The most sumptuous settings boasted special themes, such as Dickensian or North Pole wonderlands. Or Italian gardens, whirling carousels or Caribbean cruise ships.

One of the biggest parties last year was a $60,000 spectacle that party planner Jan Parrott remembers fondly.

“It had everything--charm, drama, eye-catching scale,” said the Laguna Beach-based consultant, whose Particular Parrott service handles a clientele mostly of building industry companies.

Using a sprawling vacant office facility and drawing 500 people, the event came complete with lighted trees, strolling singers and a rock dance band. The buffet tables, overflowing with lamb, pasta and other goodies, were framed by tableau-styled tributes to art masterworks of the Orient, Egypt, Italy and France.

But the same client--a builder--isn’t a repeat customer this year, said Parrott, whose roster of large-scale parties at hotels and offices is down from 19 last year to eight this year--most of the dropouts being construction-industry companies.

“Things are pretty grim for a lot of firms out there hit very hard by the downturn,” Parrott said. “They saw the handwriting on the wall earlier this year. They told me they were cutting the (party) budget or simply bowing out completely this season.”

Although Cuisine/Cuisine Etc.’s Harris said her firm’s overall sales are higher than in 1989, her corporate party business has dropped from 72 clients last year to 50 this year.

The reasons are not difficult to find.

Announcements of layoffs in Southern California industries, from high-tech and blue-collar manufacturers to major retailers, have become almost commonplace in recent months. This fall, more than 10,000 aerospace workers were let go.

But it is Southern California’s growing slump in the housing industry that currently seems the most spectacular. In Orange County alone, new home sales have plummeted by more than 20%; in home resales, more than 30%. This fall, more than 1,000 of the county’s construction workers were laid off.

Most of the companies that have deserted the usual hotel-and-club circuit are still holding parties, but at their own offices, Harris and other planners said. To reduce costs further, some are combining their annual parties for business clients with their employee celebrations.

Many employee parties are drastically down-priced. According to local professional party planners, the typical larger bashes, which once cost $50,000 to $75,000 apiece, are now down to $20,000 to $30,000.

“We’re talking a recession menu, real basic foods like meat loaf and puddings. Your Belgian truffles and New Zealand crab are out,” said Parrott. “It’s more pass-the-tray munchies, rather than fancy (food) tables.”

This new austerity was typified by a recent $3,000 party for about 150 guests at the private Modern Museum of Art in Santa Ana. It was hosted by Sterling Special Event Productions, a party planning service, and Bradford & Ivy, a marketing firm, for business clients.

While there were plenty of sparkling Christmas trees and an Ebenezer Scrooge capering on the disco floor, planner Darrell Hames cut decor and food costs with a “beach party” theme--complete with patio tables and umbrellas and a main buffet fare of burgers, pizza and fettuccine.

“That’s one result of the belt-tightening going on among companies this year. You have to be more creative in ways to meet the reduced budgets. You have to find less expensive, more offbeat locations. All this and still have a lot of fun,” Hames, a Santa Ana-based party consultant, said.

Not all companies have abandoned the big employee parties on the regular hotel-and-banquet hall circuit.

Consider just three Orange County-based companies that held their annual dinner-dances last Saturday.

The Fieldstone Co., a home builder, brought its 400 guests to the Ritz-Carlton in Dana Point. Avco Financial Services held its 1,500-guest party at an exposition building on the Orange County Fairgrounds. And PacTel Cellular’s party for 1,000 was at the Disneyland Hotel.

Even so, the temper of the times was not forgotten. “Essentially, our party was still large-scaled because our employee force is still growing,” said event coordinator Danee Miller for the Irvine-based PacTel Cellular.

But, she added, “we decided to cut out some of the extras. It’s being aware of the current mood and how other firms are being affected.”

Cutbacks or not, the idea of abandoning the big employee parties would be unthinkable, planners and others said.

“These parties have always been essential to (employee) morale and recognition. It has always been our way of saying thank you to our employees,” said Fieldstone’s Mary Hendrickson, event coordinator for the Newport Beach-headquartered company.

Besides, company coordinators and professional party planners asserted, they are counting on a rebound to the economy.

“Heavens knows, these things are cyclical,” said corporate consultant Parrott. “Next Christmas might be a whole brighter picture again.”