The city is ordering all of its agencies to prepare for spending cuts aimed at saving hundreds of millions of dollars.

While Mayor Michael Bloomberg's budget director says no agency is exempt, the Fire, Police, Correction, Sanitation and Education Departments will be asked to cut less.

The city wants to save $750 million in the remainder of this fiscal year, which ends on June 30.

It wants to save another $1.25 billion the following fiscal year.

The city's budget outlook is worse now than just a few months ago after a state judge blocked the mayor's plan to expand taxi service.

It would have brought the city millions from the sale of taxi medallions.

After the ruling, the mayor warned the city would need to start cutting its budget.

He also suggested layoffs could be on the way.