Canon's Long Island HQ cut at least 100 jobs last year but won't lose tax breaks
Canon U.S.A.'s Melville headquarters, shown in 2013. Credit: Heather Walsh
Canon U.S.A. Inc. won’t have to repay any of the tax breaks it received last year despite laying off between 100 and 150 employees at its Melville headquarters.
The manufacturer and seller of cameras and imaging equipment promised in January 2024 to maintain at least 1,081 jobs at the Walt Whitman Road building for 12 years in return for tax incentives from the Suffolk County Industrial Development Agency. The breaks are valued at $7 million over the period.
Canon exceeded the employment threshold by 11 jobs — for a total of 1,092 — at the site in January-March 2024, according to reports obtained under the state’s Freedom of Information Law.
Canon began handing out pink slips six months after winning the tax incentives. But the company was judged not to have broken its promise to the IDA because the agency determines compliance based on a business’ highest point of employment in the year, said Kelly Murphy, the IDA’s CEO and executive director.
“They are living up to the commitment they made to maintain jobs,” she said.
However, the IDA's determination that Canon honored its job commitment even with the layoffs raises questions about the effectiveness of IDA compliance procedures overall when benchmarks differ widely among the 106 IDAs statewide.
Cam Macdonald, the top lawyer at the Empire Center for Public Policy, a think tank in Albany, said IDAs were established to assist businesses in creating jobs.
"That is such an important measuring stick, such a central part of these deals that [the benchmark for determining compliance] should be something that is standardized across the state," he said. "Picking one point in the year [for the employment level] does come with the risk of being manipulated by the employer."
Canon, through a spokesman, declined to provide the current number of jobs at its Melville office. The size of the workforce since 2014 has averaged 1,467 people a year, with a high point of 1,800 in 2017, according to state records.
The company's parent, Canon Inc. in Tokyo, has expanded beyond its traditional business in cameras and photocopy machines to medical imaging equipment. Camera sales have been hurt by the popularity of taking photographs with an iPhone while remote work has dampened the demand for copy machines.
The parent reported its profit dropped nearly 40% between 2023 and last year to 160 billion Japanese yen because of losses in the medical equipment division. Sales overall increased 8% to 4.5 trillion yen, year over year.
Canon U.S.A. is on its second round of tax incentives from the Suffolk IDA.
In 2007, the IDA and New York State together provided about $100 million toward the $500 million headquarters on a former pumpkin farm south of the Long Island Expressway. At the time, the company was weighing whether to leave the state because it had outgrown its offices in Lake Success.
Canon sought additional help from the IDA in late 2023 when the earlier tax breaks were set to expire. The reports show that the company last year saved $9,027 in sales tax on purchases tied to building improvements. The property tax savings kicked in this year.
The IDA “has been instrumental in helping us remain rooted within this community,” said Amy Newman, Canon’s senior vice president for administration and the executive who certifies its employment reports. “As we continue our partnership with the IDA, we look forward to working toward our shared mission of supporting the prosperity of Suffolk County,” she said in a statement.
Murphy, the Suffolk IDA executive, said the agency has for decades used the benchmark of highest point of employment in a year to determine if a company is keeping its employment promise or has fallen out of compliance and tax breaks need to be recaptured.
Other IDAs use different benchmarks for ensuring businesses meet their employment commitment.
New York State “does not provide guidelines or have regulations concerning this,” officials at the state Authorities Budget Office in Albany told Newsday in an email. The office regulates IDAs.
Among Long Island’s other seven IDAs, five — in Nassau County, Babylon Town, Hempstead Town, Brookhaven Town and Riverhead Town — typically determine compliance by the size of the workforce on Dec. 31 each year, according to a survey conducted by Newsday.
Islip Town uses the average number of employees for the year, a standard that some other IDAs apply to seasonal businesses. The Glen Cove IDA didn’t respond to the Newsday survey.
IDA officials said they work with businesses that have fallen out of compliance to determine the reason and whether they can get back on track.
"When obligations are not met, and there is no effort to engage or correct course, we take appropriate action, including recapturing benefits,” said Tom Dolan, CEO of the Babylon IDA.
State Comptroller Thomas P. DiNapoli, who audits IDAs, successfully championed the 2015 state law that requires IDAs to have policies for the recapture of tax breaks — either in whole or part — when a client fails to keep its promises.
Asked about the lack of a uniform benchmark to determine compliance, DiNapoli spokesman Matt Sweeney said, “It’s imperative that IDAs are consistent and fair in their operations.”
Canon U.S.A. Inc. won’t have to repay any of the tax breaks it received last year despite laying off between 100 and 150 employees at its Melville headquarters.
The manufacturer and seller of cameras and imaging equipment promised in January 2024 to maintain at least 1,081 jobs at the Walt Whitman Road building for 12 years in return for tax incentives from the Suffolk County Industrial Development Agency. The breaks are valued at $7 million over the period.
Canon exceeded the employment threshold by 11 jobs — for a total of 1,092 — at the site in January-March 2024, according to reports obtained under the state’s Freedom of Information Law.
Canon began handing out pink slips six months after winning the tax incentives. But the company was judged not to have broken its promise to the IDA because the agency determines compliance based on a business’ highest point of employment in the year, said Kelly Murphy, the IDA’s CEO and executive director.
WHAT NEWSDAY FOUND
- Canon U.S.A. Inc. last year met its commitment to maintain at least 1,081 jobs at its Melville headquarters in return for tax breaks from Suffolk County despite laying off between 100 and 150 employees.
- The county's Industrial Development Agency determines compliance based on a company's highest point of employment in a year, which for Canon was in January-March 2024 when it had 1,092 employees at the site, according to employment reports.
- There is no universal benchmark that IDAs across the state use to determine compliance.
“They are living up to the commitment they made to maintain jobs,” she said.
However, the IDA's determination that Canon honored its job commitment even with the layoffs raises questions about the effectiveness of IDA compliance procedures overall when benchmarks differ widely among the 106 IDAs statewide.
Cam Macdonald, the top lawyer at the Empire Center for Public Policy, a think tank in Albany, said IDAs were established to assist businesses in creating jobs.
"That is such an important measuring stick, such a central part of these deals that [the benchmark for determining compliance] should be something that is standardized across the state," he said. "Picking one point in the year [for the employment level] does come with the risk of being manipulated by the employer."
Canon, through a spokesman, declined to provide the current number of jobs at its Melville office. The size of the workforce since 2014 has averaged 1,467 people a year, with a high point of 1,800 in 2017, according to state records.
The company's parent, Canon Inc. in Tokyo, has expanded beyond its traditional business in cameras and photocopy machines to medical imaging equipment. Camera sales have been hurt by the popularity of taking photographs with an iPhone while remote work has dampened the demand for copy machines.
The parent reported its profit dropped nearly 40% between 2023 and last year to 160 billion Japanese yen because of losses in the medical equipment division. Sales overall increased 8% to 4.5 trillion yen, year over year.
Canon U.S.A. is on its second round of tax incentives from the Suffolk IDA.
In 2007, the IDA and New York State together provided about $100 million toward the $500 million headquarters on a former pumpkin farm south of the Long Island Expressway. At the time, the company was weighing whether to leave the state because it had outgrown its offices in Lake Success.
Canon sought additional help from the IDA in late 2023 when the earlier tax breaks were set to expire. The reports show that the company last year saved $9,027 in sales tax on purchases tied to building improvements. The property tax savings kicked in this year.
The IDA “has been instrumental in helping us remain rooted within this community,” said Amy Newman, Canon’s senior vice president for administration and the executive who certifies its employment reports. “As we continue our partnership with the IDA, we look forward to working toward our shared mission of supporting the prosperity of Suffolk County,” she said in a statement.
Different standards for judging compliance
Murphy, the Suffolk IDA executive, said the agency has for decades used the benchmark of highest point of employment in a year to determine if a company is keeping its employment promise or has fallen out of compliance and tax breaks need to be recaptured.
Other IDAs use different benchmarks for ensuring businesses meet their employment commitment.
New York State “does not provide guidelines or have regulations concerning this,” officials at the state Authorities Budget Office in Albany told Newsday in an email. The office regulates IDAs.
Among Long Island’s other seven IDAs, five — in Nassau County, Babylon Town, Hempstead Town, Brookhaven Town and Riverhead Town — typically determine compliance by the size of the workforce on Dec. 31 each year, according to a survey conducted by Newsday.
Islip Town uses the average number of employees for the year, a standard that some other IDAs apply to seasonal businesses. The Glen Cove IDA didn’t respond to the Newsday survey.
IDA officials said they work with businesses that have fallen out of compliance to determine the reason and whether they can get back on track.
"When obligations are not met, and there is no effort to engage or correct course, we take appropriate action, including recapturing benefits,” said Tom Dolan, CEO of the Babylon IDA.
State Comptroller Thomas P. DiNapoli, who audits IDAs, successfully championed the 2015 state law that requires IDAs to have policies for the recapture of tax breaks — either in whole or part — when a client fails to keep its promises.
Asked about the lack of a uniform benchmark to determine compliance, DiNapoli spokesman Matt Sweeney said, “It’s imperative that IDAs are consistent and fair in their operations.”
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
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