The 9% cut will lead to 18 staffers losing their jobs according to a report in Ad Week.
In a statement Fallon said: "Even with recent new business success, we have found it necessary to decrease staff by 18 people due to budget pullbacks in our existing client base."
The cuts at Fallon follow the hiring last week of Darren Spiller, the regional executive creative director of Publicis Mojo in Australia, as its chief creative officer.
Spiller, who replaced Al Kelly when he joined the agency two years ago from StrawberryFrog, will work with Fallon chief executive Chris Foster, and brings with him experience working on accounts such as Nestle, Nike, Toyota, McDonald's and Hertz.
The cuts at Fallon follow last week's news when it was announced more than 100 jobs were being axed being at Doner.