The cut represents 22% of the office, which is known as BBDO Detroit and is part of the Omnicom Group-owned network that also includes Abbott Mead Vickers BBDO in London.
BBDO said in a statement: "In all, 145 positions have been eliminated, with reductions being made across all functions driven by the reduced level of activity and changes in the nature of planned activities."
Chrysler, like all car manufacturers, has been suffering as consumers delay making any major purchases, with US sales down by 35% for October this year compared to 2007. It has cut its advertising spending by 30% over the first nine months of 2008.
The Detroit Free Press reported this morning that 511 people will be left working in the Troy office, and that the cuts are immediate. The agency's spokesman, Roy Elvove, told the paper: "This only involves BBDO Detroit, it doesn't involve any of the other partner agencies that might do media or digital."
BBDO Detroit works on the Chrysler and Dodge marques. Until April last year it had also handled the Jeep marque but that shifted to Omnicom's Cutwater agency.
Elvove stressed that the cuts did not signify that it was losing the Chrysler business.