By Kristen Peterson

Tue, Feb 27, 2007 (7:03 a.m.)

The Guggenheim Hermitage Museum laid off several of its employees last week and told them that the host Venetian will handle museum operations.

Both Guggenheim and Venetian officials are being tight-lipped about what that will mean for the five-year-old museum.

Elizabeth Herridge, managing director of the Guggenheim Hermitage Museum, says it will continue to be programmed by the Solomon R. Guggenheim Foundation and the State Hermitage Museum in St. Petersburg, Russia.

"The daily operation of the museum, however, will be outsourced to the Venetian resort, resulting in economies of scale and operational efficiencies," she wrote in an e-mail. "We fully expect that the same high caliber of exhibitions and educational programming organized by the staffs of the Guggenheim and Hermitage will continue."

The Guggenheim Hermitage is a satellite space for the Solomon R. Guggenheim Foundation, which partnered with the State Hermitage Museum in St. Petersburg for the space that opened in October 2001. It showcases pieces plucked from both collections.

The extent of the Venetian's new role is unclear. Neither party would give details or say what prompted the change.

Ron Reese, spokesman for the Venetian, says this is not the first time that Guggenheim has outsourced work. But Guggenheim officials in New York and Las Vegas didn't respond to a question on whether this has happened before.

Questions regarding whether the hotel will influence exhibits also went unanswered.

Reese would only confirm that the Venetian is taking over the operations. "It will be similar to how we would run our retail and food and beverage operations," he said.

The Guggenheim Hermitage Museum opened at the same time as the 64,000-square-foot, Rem Koolhaas-designed Guggenheim Las Vegas. That museum, however, closed its doors in January 2003 because of lack of funds and low attendance. Its only show was "The Art of the Motorcycle."

The much smaller Guggenheim Hermitage remained open and has hosted a series of exhibits from Peter Paul Rubens, several masterworks exhibits and a pop art show. Despite Herridge's efforts, the museum has had difficulty drawing local support and building membership. Critics have said the museum will always have trouble receiving corporate and private donations while it sits rent-free in a hotel owned by Sheldon Adelson, the wealthiest man in Nevada.

The Guggenheim Hermitage finished its Robert Mapplethorpe exhibit earlier this month and is closed for installation of its spring exhibit: "Treasures from the Guggenheim and Hermitage Collections: Picasso, Monet and More." The show will feature 40 works of art from the permanent collections and is scheduled through January.

Critics have been pretty hard on the Guggenheim for the expansion of its brand. In addition to Las Vegas and New York, it has branches in Bilbao, Spain; Venice, Italy; and Berlin. Thomas Krens has long been under attack for his global branding of the museum rather than focusing on its New York operations. Two years ago Peter Lewis, the Guggenheim's largest benefactor, resigned, citing the franchises as the issue.