Playboy Enterprises Inc will outsource most of the business operations of its namesake magazine in an effort to curb losses, the Wall Street Journal said on Tuesday.

Playboy will turn over all magazine operations, except its editorial operations, to Florida-based American Media Inc, according to the paper.

The deal reached last week is expected to be funded in part from Playboy's advertising sales, the paper said.

Playboy has about 30 full-time employees working in the operations that will be outsourced, and most will be let go, the Journal said.

Scott Flanders, chief executive officer of Playboy Enterprises told the paper that the five-year partnership would help return the magazine to profitability by the end of 2011.

Playboy Enterprises has been in talks with at least one possible bidder for the Chicago-based company.

Playboy could not be immediately reached for comment by Reuters outside regular U.S. business hours.

Earlier this month, Playboy Enterprises reported a narrower third-quarter loss as revenue fell across its print, TV and licensing businesses.

Playboy's third-quarter net loss was $1.1 million, or 3 cents a share, compared with a loss of $6.2 million, or 19 cents a share, last year.

(Reporting by Deepti Govind in Bangalore; Editing by Mike Nesbit)

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