The agency’s group chief executive, Ben Bilboul, said Watson will not be replaced because his responsibilities can be picked up by Jon Wilkins, the executive chairman, and Jim Kelly, the non-executive director.
Wilkins and Kelly joined Karmarama last year.
Watson has been with the agency since 2011. Prior to this he was the chief executive at Financial Dynamics International, which is now the strategic communications division of FTI Consulting.
At Financial Dynamics he led a private equity-funded management buyout.
It is understood that Watson is planning to start up another company in the financial PR sector. He will continue to be a shareholder in Karma Communications.
Earlier this month, Karmarama was appointed to handle the £2 million Raffaello creative business. The confectionery brand is owned by Ferrero.