The ATO, which is the midst of administering the federal government's $70 billion JobKeeper wage subsidy program, has flagged that it wants to wind up its Geelong operation because of a long-term decline in staff numbers.

"The ATO has experienced a continuing decrease in staff numbers in Geelong over several years," the agency said in a notice to employees.

"Approximately 50 per cent of our workpoints are vacant in the Geelong office, which is well above the ATO vacancy target of 10 per cent."

The Community and Public Sector Union is calling on the government to block the closure, arguing that regional offices are important to support the economic recovery.

The union's deputy national secretary Beth Vincent-Pietsch warned that shutting down the Geelong branch would rip $9 million out of the local economy.

"Now is not the time to be cutting jobs from anywhere, but regional centres in particular. The ATO needs all staff on deck to assist with the recovery from the economic impact of COVID-19," she said. "The government needs to be investing in public sector regional jobs, not cutting them."

Ms Vincent-Pietsch said the ATO should be looking at facilitating remote work opportunities for staff who want to remain with the agency rather than shutting its office.

"The CPSU wants to see this offered as a real option for staff who wish to keep their jobs," she said.

The organisation said it had been unable to identify sub-leasing opportunities and its lease on the site expires in June 2021.

"As a result, we are proposing to close the site," the ATO said.

It is understood that 121 staff will be affected by the move.

The agency said employees can opt to move to another ATO office, which may involve undertaking different work.

They could also consider being redeployed to another Australian Public Service agency in Geelong, in which they would have to accept the pay and conditions offered by their new employer.

The ATO said workers would also be entitled to apply for a voluntary redundancy.

Any requests for relocation assistance would be considered on a case-by-case basis.

The agency said staff would likely have until the end of November to decide on what they want to do.

The announcement comes as the organisation has ramped up its numbers, including bringing forward the hiring or casual and labour hire workers normally taken on to cope with the spike in workload caused by the end of the financial year.

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The ATO has hired an additional 1169 staff, including 868 casuals, 191 permanent employees and 73 labour hire workers, to help meet the surge in demand for its services caused by administering the JobKeeper program as well as the early access superannuation scheme and the business cash flow support program.