Yahoo to shut down most operations for a week to cut costs

Yahoo Inc. confirmed Tuesday that it would shut down most operations during Christmas week to save money, but experts said the holiday lull was par for the course in the Silicon Valley.

The Internet company is mandating that most of its employees worldwide, except for those responsible for “essential functions” such as customer service, take off work Dec. 25 through Jan. 1.

In the U.S., employees can either use vacation time or take unpaid leave. Christmas and New Year’s Day will still be paid holidays. Workers outside the country will be paid according to local standards, said spokeswoman Dana Lengkeek.

Sunnyvale, Calif.-based Yahoo told its staff about the break in April and has recommended that employees take the week off in the past, Lengkeek said.

“This is nothing new, just formalized a little more,” she said. “It’s fairly standard in the industry, closing down during a traditionally slow week and giving employees time to recharge. A lot of employees tend to take that week off anyway.”

In addition to reducing operations, Yahoo will be turning lights and computers off in all its facilities, though the company would not disclose how much it expects to save. Consumers will not see any difference on the website, which will continue to feature news, Lengkeek said.

Yahoo has been struggling to keep costs in check, laying off nearly 700 employees in the spring. But several other Silicon Valley firms -- including Adobe Systems Inc., Apple Inc. and Hewlett-Packard Co. -- have used the holidays to cut costs, shutting down for a week or more.

“It’s something that a lot of companies do in the tech world to control costs and to have more influence over when people are out of the office,” said Steve Weinstein, vice president and senior research analyst at Pacific Crest Securities in Portland, Ore. “Yahoo’s done something similar to this in the past.”