A business survey this week estimated that Christmas party spending is down from about one billion pounds in 2007 -- the year before the recession hit -- to 600 million pounds this year.
Banks are among those most likely to scrap the champagne, thanks as much to debts incurred during the credit crunch as a fear of exacerbating the public perception that they are living the high life while ordinary people struggle.
Royal Bank of Scotland last year kicked up a media storm after spending a reported one million pounds on their Christmas parties, with another 300,000 pounds to treat its top executives.
RBS is now 70-percent owned by the taxpayer after its huge exposure to risky assets forced a massive government bail out.
It was following a long tradition of big spending at Christmas, but this year managers have taken a more diplomatic approach, with the mass get-together scrapped in favour of events organised by individual teams of workers.
The firm will still make a contribution but it will be small, a spokeswoman said, telling AFP: "Our staff have worked very hard over the last 12 months.
"We won't waste bank money but the long-standing tradition of paying a small contribution towards staff parties has been judged appropriate."
In the same vein, Lloyds TSB, another bank which has spared no expense in the past for its Christmas parties, has toned things down this year.
Previous celebrations included a party in the former Millennium Dome, complete with a boat trip down the River Thames, a menu devised by celebrity chef Gordon Ramsay and a mini-concert by the Sugababes girl group.
Such expense was judged "inappropriate" this year.
The austerity drive is not just the preserve of banks. Carmakers are among the firms hardest hit by the recession and have laid off thousands of people in Britain -- and their plans have been changed accordingly.
"We don't feel it was right having a company-funded Christmas party and instead, we chose to have one paid for by the employees," said a spokeswoman for Honda UK, which cut 1,300 jobs at its Swindon plant this year.
"Money wasn't really the issue but given the situation at the Swindon factory, it is a token gesture, to show our solidarity," she told AFP.
A YouGov survey last month found that just 38 percent of employees said they were having a Christmas party this year, against 30 percent who were not and 32 percent who were unsure of their firm's plans.
However, some bosses have opted for cutting back rather than cancelling their events, swapping evening meals for cheaper lunches and replacing the live band with karaoke to keep up morale.
And this is key, according to a survey of 1,300 managers by the Chartered Management Institute which found that two thirds believe a festive celebration was "vital" to recognise the hard work staff put in all year.