This year you may not have to worry about that awkward encounter with your boss at the office holiday bash. Many businesses are forgoing their holiday parties due to a slumping economy. So, no top-shelf scotch, no co-workers getting down on the dance floor, no heaping platters of lukewarm hors d'oeuvres, as NPR's Jenny Gold explains.

JENNY GOLD: Television networks ABC and CBS, fashion designer Marc Jacobs, Walgreens, Morgan Stanley and JPMorgan, they've all canceled their holiday parties. Even the government is cutting back. The chairman of the Joint Chiefs of Staff actually retracted the invitations he already sent to his annual Pentagon party, citing "trying financial times." Over on Wall Street, Swiss financial firm UBS canceled its party, too. Spokeswoman Karina Byrne says this year UBS decided a party wouldn't be sensitive to the 5,500 employees being laid off.

KARINA BYRNE: Obviously, there is some mild disappointment, but, you know, I think given the way the year has gone, you know, our employees are more concerned about some larger issues than the cancellation of a holiday party.

GOLD: Byrne says it also wouldn't send a good message to wary shareholders. Not everyone is canceling, though. Many are scaling back. That's what NPR is doing. Yahoo is going ahead with its traditional holiday party, despite a plan to cut 10 percent of its workforce in December. Business consultant John Challenger says Yahoo has it right.

JOHN CHALLENGER: Canceling parties altogether is a very tough statement, it seems to me, about where the company is at. It can only be damaging to morale. It makes people even more insecure in their jobs.

GOLD: Only 77 percent of companies are planning parties this year, down from 90 percent last year. That's according to the Challenger, Gray & Christmas survey. Yup, that's their real name.

CHALLENGER: Parties are like the canary in the coalmine. They are symbols of where companies stand, how they see their future, you know, how they think about their workplace culture.

GOLD: Florists, restaurants, and party venues across the country are taking notice.

CHRISTINA HOAG: She's putting together a sweet tray right now. There's double-dipped strawberries, Oreo truffles, chocolate eclairs that have been dipped again in...

GOLD: Christina Hoag started Matters of Taste catering in Alexandria, Virginia, more than 20 years ago. She says one of her corporate clients canceled and many of her longtime customers never called. She's found new clients by marketing more aggressively, but the budgets for many of the parties she's booked are smaller - more cocktail parties and luncheons, fewer sit-down dinners. Some companies have asked employees to bring their own desserts, potluck style. So Hoags had to get creative to accommodate those new budgets. For one thing, she's changed the way she serves shrimp. She says they're popular, but they're also expensive.

HOAG: If you put shrimp out, people eat seven to eight shrimp. If you offer it as a passed hors d'oeuvres, you have control over the amount that you're passing and therefore can control the cost by maybe only bringing one or two shrimp per person.

GOLD: I see some beautiful orchids on that tray. Is that something you might skip as well?

HOAG: No, presentation's always important.

GOLD: But they will make other subtle changes like serving on smaller plates so partygoers take less food each time they visit the buffet. Despite the cutbacks, Hoag's still optimistic about her party catering business. And if the economy improves by next holiday season, she might even be able to put a few more shrimp back on the plates. Jenny Gold, NPR News.

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