You know the credit crunch is real when reality intrudes on the Playboy (PLA) Mansion.

There’s even talk of cutting bunnies to reduce costs.

Hugh Hefner has been advised to reduce staff in his multi-million dollar empire to weather the global economic turmoil, the London Telegraph reports. The 83-year-old silk pajama-clad publisher has been advised to cut staff in his New York and Los Angeles offices or face possible bankruptcy.

There’s no official word, but some bunnies could be required to turn in their ears and tails.

Playboy Enterprises declined to comment on the report, saying it doesn’t release employee information.

Playboy’s stock has been hammered, in part due to changing attitudes and raunchier competition from the Internet. There’s apparently a market for amateur pornography, and YouPorn is happy to fill it. The shift has also hit the competition, including privately held Vivid Entertainment and Penthouse.

The market has also shifted to magazines such as Maxim that feature a mix of humor, gadgets, lifestyle information in addition to scantily clad babes.

Apparently, Hefner’s 250,000-word (or so) “Playboy Philosophy” didn’t deal with profit and loss.

The cutbacks at Playboy may mean that a whole generation of boys will grow up without the delusion that women come with a staple in their navels.