Squeeze Is On, as Agencies Cut Budgets

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The news already feels old: The process of agencies crafting their budgets is being complicated by the broader collapse in financial markets. But the ramifications are just beginning to crystallize.

Holding companies and their agencies are freezing or cutting spending on everything from new hires and temporary help to travel and entertainment. Layoffs also have been common and most holding companies are reexamining bonuses.

WPP Group perhaps has been the most aggressive at cost cutting. It instituted a freeze this month on all hiring — regardless of salary level — including replacing individuals and filling open positions, according to an internal e-mail from worldwide CFO Paul Richardson.

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