Alex Rodriguez -- Major Shrinkage in Miami

Alex Rodriguez -- who signed a $275 million contract with the Yankees in 2007 -- is now pinching pennies by downsizing in a spectacular way.

A-Rod -- who dumped his $30 million oceanfront Miami palace -- just bought a nearby condo for $2.1 million -- around 15 times cheaper than his previous digs.

And when we say it's modest, we mean it. The "luxury" condo, purchased last month, is 1,725 sq. ft with 3 bedrooms and 3 bathrooms -- a broom closet in ARod's world.

The Miami mansion was a comfortable 19,861 sq. ft., with 9 bedrooms, 11 full bathrooms (plus 2 half bathrooms), a 4-car garage, a state of the art security system with 16 cameras, and a Zen garden.

A-Rod appears to be gearing up for a long winter in an uncertain future.