This image has been posturized through a photo editor (image has abrupt changes from one tone to another). You need to posturize an image before you can make a papercut portrait (shown below). If you don't have a photo editor,
Picnik is a free online photo editor.

This image is a papercut portrait made completely with various papers!! Paul Overton of Dudecraft made this papercut portrait - check out his
blog for complete instructions on how to make this very cool portrait with paper! Found via
One Pretty Thing