From the pinnacles of power by Fortune editor at large Patricia Sellers
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December 22, 2008, 3:27 pm

A vacation you can’t refuse

By Jessica Shambora

It’s Christmas week, always a quiet time at workplaces across the country. But this holiday is anything but typical. The quiet will stretch way beyond Christmas at many offices and factories this year.

No surprise, the Big Three automakers are temporarily shutting North American plants, in numbers correlating to their varying degrees of peril. Chrysler closed all 30 of its plants for a month. General Motors (GM) followed suit with 20. Ford (F) will shut down 10 plants for an extra week in January. Overseas production is also winding down, dashing hopes for relief  from emerging markets.

While we’re used to Europeans taking lots of time off, this holiday is exceptional. Among those set for an extended close: a Nokia plant in Hungary, Michelin factories in Ireland, Fiat plants in Italy, and a unit of stainless steel-producer, ThyssenKrupp, in Germany.

Workplaces across North America, meanwhile, such as a Whirlpool plant in Middle Amana, Iowa, will close for longer than usual. Even state governments, from California to South Carolina, are proposing unpaid work furloughs as they struggle to cut budgets.

And in Silicon Valley — where I’m writing from this week — companies are jumping to cut costs, having learned a thing or two from being at the forefront of the last downturn. Hewlett-Packard (HPQ), Cisco Systems (CSCO), Apple (AAPL), Adobe, Applied Materials and Advanced Micro Devices all plan to extend regular holiday breaks.

As the New York Times echoes in “More Companies Cut Labor Costs Without Layoffs” on the front page today, companies are turning out the lights to cut operating costs and save on compensation. Some pay reduced wages or none at all during their shutdowns. At Dell (DELL), for example, Christmas is part of a paid week off as usual. But management is urging employees to take five unpaid days off anytime during the fourth quarter. That’s one way to improve earnings!

And at H-P and Cisco, employees are being told which days to take off around the holidays; those extra days count against paid vacation. That’s like a lump of coal, but you don’t see too many employees protesting loudly, do you? Maybe because a forced short vacation is, after all, better than a permanent one.

Mike, you are incorrect about Dell. They don’t force people to take time off at the end of the year.

It’s just that vacation time is not rolled over to the next year and cannot be sold back to the company.

Posted By Dick, Austin, Texas : December 22, 2008 11:38 pm

I work for one of the Silicon valley companies mentioned out of a remote location. I agree that too much is being made of this. So I have to use up some of my PTO. I am greatfull have this job. It is a small thing that we as employees are being asked to do. If it results in less or no layoffs then its a well worth it. I for one am looking forward to not working these days.

Posted By Sam Phx,AZ : December 22, 2008 11:22 pm

I work for one of the companies. However, because my organization works with customer, we were told that our organization would be working but with a skeleton crew to deal with customer orders for year end

Posted By Minnie from Roseville, CA : December 22, 2008 7:20 pm

HP is sending many mixed signals to employees.

First, HP enjoyed profits of approx. $7B for the past nine months. Yes, $7B!

Second, HP made their third work force reduction of CY2008 during this holiday season cutting about 10% — and this 10% is NOT related to the EDS acquisition. Happy Holidays to this 10% — you no longer have a job in this great economy even though this 10% contributed to HP realizing the $7B profit for the past 9 months.

Third, HP cancelled employee pay raises for FY2009 (but I’m guessing executives still get bonuses from that $7B profit.)

Fourth, HP is stopping reimbursement of “home office” expenses for “home office” personnel — expenses such as telephone and internet service. I guess if “bank” executives can still get six-figure bonuses after getting billions from the bailout TARP funds, then HP doing what they are doing is not a “crime” — but possibly the workers need to speak out.

Fifth, HP’s HR VP said for field people to spend this extra time with family and no one needed to be checking voice mail or email during the holiday shut down. But wait, there’s more.

And sixth, HP’s VP of NA Sales, said no one in the field better lose a deal to the competition and give an excuse of the holiday shutdown.

Ahhh, ’tis the Holiday season and spirit!

Posted By Steve, Englewood, Colorado : December 22, 2008 5:29 pm

I am an employee of a tech company that is requiring a paid time off at year end. They have made it flexible, and offered people with critical business requirements the opportunity to shift the actual time taken off. To me this is a godsend … of course I’d feel differently if it were unpaid, and I sympathize with those folks – but I can tell you, I look forward to a break that is really a break, with everyone else mostly standing down at the same time. This is not that big a deal, I know tech companies who have been doing it for years and their employees tend to relish it.

Posted By Gordon, Atlanta, GA : December 22, 2008 4:21 pm

All we have to fear is fear itself. Fear of a dire situation is making people in society do things that give us something to worry about.

Posted By Patrick Forrester Perrysburg Ohio : December 22, 2008 4:03 pm

What you fail to mention here is that many companies have always done end-of-year “forced” vacations. HP has done this for years. Cisco has always made people with high PTO balances to take time off at the end of the year. As has Dell, IBM and many other tech giants. Furthermore, vacation time is a huge hit against the expenses and this is a way to cut down on that pool of dollars owed.

The media is making a mound out of a mole hill when it comes to tech companies closing down between Christmas and New Years. It’s really not that new or big of a practice, it just got some public face time due to the current economic conditions.

Posted By Mike, Aurora, Colorado : December 22, 2008 3:43 pm
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Pattie SellersPatricia Sellers has written some of Fortune's most talked-about cover stories, including "Can Meg Whitman Save California?", Melinda Gates ("The $100 Billion Woman"), "MySpace Cowboys," Martha Stewart ("I cannot be destroyed"), Ted Turner ("Gone with the Wind") and Oprah Winfrey ("Oprah Inc."). And she has broken ground with insightful pieces on career management issues such as ego ("Get Over Yourself!"), and "Charisma: Do You Need It? Can You Get It?" Pattie chairs the annual Fortune Most Powerful Women Summit, the preeminent gathering of women leaders in business, philanthropy, government, academia, and the arts. And she has helped oversee Fortune's "Most Powerful Women in Business" cover package since its launch in 1998. She started at Fortune in 1984, covering the big consumer brand companies.
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