I think part of the problem with these events is that to some they are seen as a perk and to others they are a tortuous summons that has to be endured.
A lot of people would be upset if they were cancelled and an equal number relived.
I've worked both private and public sector and in the former there are some very lavish Christmas events with hotels/taxis the norm for staff who lived outside a "reasonable" radius from the venue. Or in a few cases where the event itself was remote and hotel accommodation was for all (plus free food and drink).
In the public sector it's very different- as it should be imho when effectively spending from the public purse. Pretty low key events sometimes partially subsidised but most often self funded.
In the current economic climate it's an easy win for Christmas event to take a hit in the private sector.
What's interesting is how that's managed and where the cuts are made.
Personally I'd rather see savings made to the venue and entertainment rather than a change in policy that means some people who want to can't attend.
However my biggest grip in both sectors is an expectation of attendance.
The idea that choosing not to attend these events (especially when you are paying for the "privilege" in full or in part) is a black mark against you is ridiculous.
I've spent years gritting my teeth and going to events I don't enjoy (for clarity this isn't about the people I've worked with, I just don't enjoy these types of events - even the most lavish private sector ones).
But in the last 5 years I've just stopped and if pressed make a trite excuse - other previous plans that can't be undone. It hasn't impacted my standing at work and I know other people who feel as I do who are now doing similarly (I think post pandemic has had an impact here).