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It’s pretty common. Have your last acting Director or Supervisor write you a letter of recommendation. That way they know it wasn’t based on performance. Especially if the account was not lost. I would be as open as honest as possible. Large industry but everyone knows someone and they all talk. Good luck!
You can also try to game the situation for the next few months. Keep LinkedIn as is. Tell potential agencies that you are looking for new opportunities. No need to bring up being let go at this point (unless they ask, which is unlikely). You are more desirable if you are employed, so move forward as if you are. Also, get a list of referrals and explain your approach. They should be willing to help you out.
It’s agency life. Most agencies understand this happens all the time. It does look better for you if a number of folks were laid off at the same time (which I assume is the case if there were broad budget cuts). Keep LinkedIn as-is for now, but don’t feel it’s a negative to disclose if asked.
I’ve done it both ways. If they write you a good letter of recommendation (which you should probably write yourself and give to them) then you can say employment ended. But if they don’t then withhold the truth. It potentially makes you a more marketable candidate