VCCP is closing its Sydney office from the end of next month, leaving 19 staff without jobs.
The agency cited "wide-ranging impacts" caused by the pandemic for the decision.
The global group opened in Australia in 2012.
VCCP acquired Sling & Stone, the Australian PR and communications firm founded by Vuki Vujasinovic, in 2021.
This business is unaffected by the local agency office closure.
The statement from VCCP: "Following the many wide-ranging impacts caused by the global pandemic VCCP has taken the difficult decision to close its operation in Sydney.
"We are in discussions with a partner in the region to explore a strategic alliance that could facilitate the transition of our people and clients following the closure.
"We are hugely proud of what VCCP Sydney has achieved in the market since the office first opened a decade ago and we would like to thank all our staff and clients who have worked with us during this period.
"Watermelon, Someone and Sling & Stone are all unaffected by this news and continue to show strong growth in the market. As a group, we remain committed to these businesses and the Australian market."
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