Playboy to Cut Staff by Half as It Relies More on Outsourcing

Mar 1, 2010 2:15 PM PST
CHICAGO — By year's end, Playboy Enterprises Inc. is poised to cut its number of employees by half as business partners take over its existing operations and expand into new ventures.

That's the word from CEO Scott Flander, who said Playboy has reached two major joint-venture or licensing deal agreements that shift basic functions to contractors with greater scale and expertise.

Flanders, who made those comments to the Chicago Tribune on Monday, said that other deals — including the one that outsourced its noneditorial functions of its legendary magazine to American Media Inc. — already have taken place.

Flanders said that another deal with IMG Licensing Worldwide to take over the company's operations in Asia could be expanded to Europe, as well.

With the moves, Playboy will be more profitable but, like its centerfold, "smaller and leaner," said Flanders, acknowledging the March edition of Playboy, which has shrunk slightly in size.

In a year, he said, the Chicago-based media company could cut its headcount of 573 employees by half.

Flanders also said that Playboy will proceed with plans to open four or five additional entertainment venues with partners by year's end, including a casino in Mexico and a nightclub in Miami.

He also noted that the Spice Network and Playboy TV need to make a much stronger partner to take the lead.

"There's no aspect of the business that I'm more focused on than TV," he said. "Size matters."

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