In the United States, Yahoo employees have the option to use vacation time for the days not covered in the holiday schedule or they can take unpaid leave. For workers outside the Unites States, "time off will be paid consistent with local standards and laws," according to the company’s spokeswoman.
However, employees responsible for "essential functions," such as customer service, will continue to work during this festive period.
The shutdown "allows employees to recharge and the company to reduce operating costs for the week," the company said in a statement.
"It is also in line with many other companies in the technology sector as well as other industries," the company said. Yahoo also noted the decision to shut down was made in April and in past years it has reduced operations and encouraged employees to take time off during the holiday season.
IDC analyst Karsten Weide said the Yahoo’s latest cost-costing move makes good economic sense.
"Carol Bartz’s (Yahoo’s chief executive) primary focus is profitability and this is something she can directly control," Weide said. "They desperately need to get the stock up and when you think of all the employees Yahoo has, sending most of them home for the holidays is going to save the company a lot of money."