Regardie's magazine, which has celebrated and skewered the business community of Washington under the motto "Money, Power, Greed," will cut back from monthly publication to once every two months and lay off most of its editorial staff in an effort to stem growing losses.

Bill Regardie, who founded the magazine 12 years ago as a real estate guide, blamed a steep drop in advertising since early last year for the cutbacks. The magazine's core advertisers are local real estate developers and brokers, who have been hit hard by the economic slump.

"You can't have the kind of depression that businesses in Washington are facing and not have the magazine be hit very, very hard," Regardie said yesterday.

The magazine's ad revenue is down about 26 percent over last year to $6 million. The decline led to a loss last year "in the low-six figures," according to Regardie, who said the magazine was "solidly" profitable between 1985 and 1989. He estimated the publication will generate about $4 million in revenue this year -- about half its 1989 total -- unless the economy turns around.

The dismissal of 10 of the 35 employees at Regardie's and two related companies will leave Regardie's with only three full-time editorial employees, editor Brian Kelly, managing editor Bob Vasilak and special reports editor Michael Pretzer.

Kelly said yesterday that the magazine would rely more heavily on freelancers to produce each issue. "It's a survival strategy in an extraordinarily tough ad climate," said Kelly. "But I'd rather do this than go out of business."

Regardie's will switch from monthly to bimonthly status with its next issue, which is due out in two weeks. In October, anticipating a turnaround in the local economy, the magazine will begin publishing on a 10-times-per-year frequency. Regardie's has been published monthly since January of 1984.

Started in 1979 as Real Estate Washington and renamed Regardie's a year later, the magazine has won praise and courted controversy over the years with its investigative articles, bold graphic style, profiles of local business celebrities and cheeky tone that reflected the sometimes swaggering personality of its namesake and founder.

The winner of numerous awards for editorial excellence, Regardie's and Regardie himself also generated charges of racism in May of 1989 when the magazine featured former Mayor Marion Barry on its cover under the headline "Jerk in the Box." Regardie, who was an early supporter of Barry, later apologized in print for the headline and illustration of Barry as a pop-up clown.

Although most magazines and especially business magazines have been hurt by the recession and war-related uncertainties, Regardie said his magazine has little subscription income to offset its ad decline.

About 50,000 of Regardie's 62,000 monthly copies are mailed free to businesses and high-income households, a readership-building strategy called "controlled circulation" that is employed by many publications, including Dossier magazine. Controlled-circulation publications also typically have lower ad rates than do subscription magazines. Regardie's charges $4,000 for a full-page color ad.

Former staffers said part of the magazine's problems were the result of lavish spending on such trappings as offices overlooking the Potomac River in Georgetown, and perks like company-paid Jaguars, Porsches and Mercedes for top editors and executives.

"They did everything first-class," said one laid-off employee.

Both Regardie and Kelly said, however, that the magazine began cutting back in the latter half of 1989, as the real estate market began to slow.

In an earlier round of cuts, the company last August laid off a dozen workers and cut salaries by 10 percent in November. Regardie said he would also seek to sublease some of his company's office space.

During the peak of the magazine's business success in mid-1989, Regardie said he entertained an offer to sell it to American Express Co. for about $25 million. But the owner said he did not want to give up control and is no longer considering a sale.

"Money, Power and Greed was a great phrase for the 1980s," said Regardie. "But I got news for you. This city will still be about money, power and greed in the 1990s. If you don't think so, you better switch to the Style section."