In my experience xmas to NY holiday shutdowns are more likely to not come out of individual PTO, but I'm sure this varies.

We do something like this now, and the rationale is that it's a positive experience for the staff, gives everyone a bit of a break, and you only "lose" days that nobody was very focused in anyway.

My office shutdown this year is three full weeks, from the 20th to the 7th. Nobody is burning PTO.

How does shutting down the office remove PTO obligations?

I worked at a company where we had 10 days of vacation + the office shut down for the last week of the year. Nobody had to use vacation time during that 1-week shutdown. If anything, it increased PTO accrued obligations because nobody had to use their PTO for time off during that week.

It varies by company. Accrued PTO is carried on the balance sheet as a liability, since it's owned to employees and would generally have to be paid out in cash if the employee is terminated. Reducing that liability makes several financial metrics look better. Some companies shut down for a week and require employees to use up their accrued PTO (or take unpaid leave). Other companies give it "free" essentially as company holidays. There's no right or wrong here, it's just one of many factors you have to consider when deciding where to work.

Worked at a company that would do that (using PTO or unpaid) with a couple months notice.. really messes with any vacation plans you might have made before you've been there long enough to accrue significant PTO!

Our office shutdown doesn't use PTO, either.

My friends in agency life used to have their office shutdown from the time of the holiday party, until the new year. Which was about 2 to 2.5 weeks.

Where I work everyone gets Dec 24 - Jan 2nd off, "for free." You can also take PTO along with it if you want a longer break.

Hmm... in a few companies I've worked holiday shutdown was not coming out of PTO budget.