Canon U.S.A. cuts jobs in Melville less than one year after winning more IDA tax breaks

Canon U.S.A. Inc., one of Long Island’s largest employers, recently laid off between 100 and 150 employees at its Melville headquarters, according to people familiar with the company.

The job cuts represent between 9% and 14% of the Japanese company’s local workforce, which totaled 1,081 employees in December, based on Suffolk County documents.

Isao “Sammy” Kobayashi, president and CEO of Canon, confirmed on Monday to Newsday that “there were position eliminations” but declined to provide details, including the number of affected employees and the departments they worked in.

The layoffs took place to “streamline operations and promote efficiency in order to achieve the necessary levels of performance that are required to meet our targets and remain competitive,” Kobayashi said in a statement in response to Newsday questions.

The company’s parent, Canon Inc., in Tokyo, projected in April that it would end the year with a profit of 305 billion yen, ($1.9 billion), a 15.3% increase from 2023.

Sales were projected to climb 4%, year over year, to 4.35 trillion yen ($27.7 billion).

Canon Inc. also reported an 8.8% decline in camera sales in the January-March period compared with a year earlier as consumers continue to opt for taking photos with their cellphones instead of Canon’s digital cameras. Sales were up, year over year, for photocopying machines, medical imaging equipment and other products.

“We aim to achieve our fourth consecutive year of sales and profit growth,” the parent company told stock analysts in April.

In Melville, which serves as the company’s Americas headquarters, employees receiving pink slips will receive a severance package that includes salary, healthcare benefits and outplacement services, according to Kobayashi, who was named Canon U.S.A. CEO in January.

The job cuts “will support the company’s ability to make decisions in a faster and more agile way … [Canon U.S.A.] operates in a competitive and fast-changing industry, so we must effectively adapt to our customers’ needs and the public’s ever-evolving relationship with advancing technology,” he said on Monday.

Kobayashi also said there would be “specialized” hiring in Melville in growth areas, such as equipment for making semiconductors.

The downsizing comes seven months after Canon U.S.A. won $7 million in additional tax breaks over the next 12 years from the Suffolk County Industrial Development Agency. The company had threatened to jettison the office on Walt Whitman Road and have its employees work from home permanently.

“Our experience [during the COVID-19 pandemic] over the past three years has proven that we don’t need a brick-and-mortar building to be successful,” Seymour Liebman, Canon’s executive vice president, chief administrative officer and general counsel, told the IDA in December. “We are currently operating a hybrid model where employees work from home three days per week, and a transition to fully remote would substantially cut operating costs.”

Canon requested additional help because a 10-year incentive package initially approved in 2007 for $35 million was set to expire. Those tax breaks played a key role in the company’s decision to relocate its headquarters from Lake Success to a former pumpkin farm south of the Long Island Expressway instead of out of state.

Canon moved into the $500 million building in early 2013.

In return for the additional IDA aid, the company pledged to retain all its employees who earn, on average, $112,230 per year, and to invest $8.4 million in improvements to the wireless network, conference rooms, a training center and imaging equipment in the 696,000-square-foot building, which it owns, according to IDA records.

Asked on Monday how the jobs cuts would impact Canon’s tax breaks, Kelly Murphy, the IDA’s CEO and executive director, said it would “continue to monitor the situation.”

She said she had spoken with Canon executives who told her of their “intention to remain in compliance with their commitments” in exchange for receiving the IDA’s assistance.