Times are tough at the Playboy (NYSE:PLA) mansion -- and when the going gets tough, the tough get cutting.

Playboy recently announced that it will eliminate 30 positions (approximately half of which are currently open, according to the company) and streamline its editorial and programming sections. The company expects these moves to save $4.5 million.

The changes accompany a reduction in earnings; Playboy expects a restructuring charge of $0.06 per share, and a total loss somewhere between $0.10 and $0.13 per share when Playboy reports second-quarter earnings early next month.

Playboy has experienced severe challenges to its brand dominance the last few years. It once ruled the roost as the platform to show off sexy women and hip, hedonistic culture. But its brand no longer seems as cool as it once did to the younger set, as periodicals like Maxim captivate the college-age crowd.

Playboy's slumping fortunes have unsurprisingly hurt its revenues. When I reported on the company's first-quarter earnings a couple months back, I discovered that net revenues declined by 1.7%, while operating income tumbled by 68%. According to the most recent 10-K, net revenues were $329.4 million in 2004 and $338.2 million in 2005 -- hardly vigorous growth.

I applaud Playboy for slashing some costs -- and so did the market. Wall Street traded Playboy up 1.4% yesterday, on a decidedly down day for more stocks. But the cuts still won't drive revenues; only smart, effective marketing will. CEO Christie Hefner must truly ponder Playboy's current relevance and produce some better publishing results. When the core magazine asset starts to grow again -- for optimism's sake, I won't use the dreaded word "if" -- the company will get back on track.

Cutting costs are a good first step, but Playboy needs to find strategies to produce a fit top line. Perhaps the purchase of Jenna Jamison's Club Jenna asset will improve Playboy's prospects, helping it to compete against competitors such as New Frontier Media (NASDAQ:NOOF). And the exposure afforded by Sirius Satellite Radio (NASDAQ:SIRI) can't hurt, either. The Playboy Radio channel, which debuted this past March, has seduced one million subscribers. Shareholders are crossing their fingers that many of those satellite-radio subscribers will consume other Playboy products as well.

Time will tell whether these developments lead to robust revenues. Personally, I think Playboy still offers good long-term potential in the adult entertainment market. But its current outlook and struggling publishing division make it a higher-risk stock.

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Fool contributor Steven Mallas owns none of the companies mentioned. The Fool has a disclosure policy.