Leonardo threatens UK exit: 12,000 jobs at risk as ageing military fleet falls behind Europe
SPECIAL REPORT: DEFENCE
Britain’s last helicopter manufacturer warns of complete withdrawal from UK operations as the Ministry of Defence delays on £1 billion contract, pushing the defence giant to breaking point. Here we examine the crisis at Leonardo and he particular challenges for defence contractors and recruitment agencies
With 3,300 direct jobs at Yeovil facility alone and thousands more in supply chains threatened, the crisis exposes deeper concerns about the UK’s declining military readiness as European neighbours modernise their forces whilst Britain’s Puma fleet remains grounded.
In an ultimatum that has sent shockwaves through Westminster and defence circles, Leonardo’s chief executive Roberto Cingolani has warned he may abandon all UK investment following years of government delays on crucial military contracts, putting thousands of highly skilled jobs and Britain’s sovereign helicopter manufacturing capability at immediate risk.
The Italian defence giant, which operates the historic Yeovil facility in Somerset—Britain’s last remaining helicopter factory—has issued what industry sources describe as a “last-ditch” warning to Defence Secretary John Healey.
In a private letter first reported by The Telegraph, Cingolani described the long-delayed New Medium Helicopter (NMH) programme, worth approximately £1 billion, as a “cornerstone” of the company’s UK future, warning that further delays would “force a reevaluation of Leonardo’s UK presence.”
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Jobs on the line: The scale of the crisis
- 3,300 direct jobs at risk at the Yeovil facility alone
- 2,800 permanent employees with thousands more contractors in immediate jeopardy
- 9,000 additional jobs in extended supply chains threatened
- 31,700 UK jobs supported by Leonardo’s broader operations
- £2.5 billion annual contribution to UK economy at stake
Leonardo-dependent contractors face uncertain future
The employment crisis at Leonardo presents particular challenges for defence contractors and recruitment agencies. Unite the Union reports that the Yeovil site currently supports 2,800 directly employed workers alongside thousands more engaged as contractors or within its supply chain—a workforce structure that has come under scrutiny as the facility’s future hangs in the balance.
Reviews from former contractors indicate it is very hard to become permanent at Leonardo, whilst other sources note tensions between long-term employees and contractors, with one reviewer observing:
Shop floor managers waltz around looking busy but sadly lack the knowledge to make decisions, long-term employees seem to sit and watch the contractors do the work.
An agency worker shared their experience:
Unfortunately, I was hired as an agency worker, so I didn’t get access to the same benefits/level of pay as a permanent employee. The pay was fair for an entry-level job and for the cost of living, but was far too low for the levels of stress associated with the job.
What is Leonardo’s recruitment policy?
However, Leonardo’s official recruitment policy suggests a more structured approach, with the company stating it “only accepts applications from recruitment agencies on their Preferred Supplier List,” indicating controlled contractor engagement alongside substantial investment in permanent staff through apprenticeships and graduate programmes. The company invests approximately £3.5 million annually on employee training and development, making it one of the UK’s largest employers of engineering apprentices and graduates.
No contract for 14 years: “We cannot subsidise Yeovil forever”
Speaking to investors in November, Cingolani was blunt about the company’s predicament:
It is14 years that Yeovil didn’t get any contract from the UK government. It is getting difficult to keep this large plant alive without institutional collaboration.
The warning comes as Leonardo remains the sole bidder for the NMH programme following the withdrawal of Airbus and Lockheed Martin from the competition last year. The company submitted its best and final offer in April, yet the Ministry of Defence has repeatedly pushed back the decision deadline, with industry sources citing the troubled Ajax armoured vehicle programme and Treasury spending concerns as contributing factors.
Originally scheduled for release this year, the government’s Defence Investment Plan has now been delayed until 2026, leaving manufacturers in limbo despite Prime Minister Sir Keir Starmer’s pledges to increase defence spending to 3% of GDP in the next parliament and 3.5% by 2035 under NATO obligations.
UK military capability falling behind European counterparts
The Leonardo crisis is symptomatic of broader failures in UK defence procurement that have left British forces operating increasingly outdated equipment compared to European allies. The Royal Air Force’s Puma HC2 transport helicopters, which the NMH programme is intended to replace, have already been retired from service, leaving a critical capability gap.
Nations across Europe have modernised their rotary-wing fleets, while Britain’s military aviation has stagnated. The delay in replacing the Puma fleet—combined with similar procurement failures across other platforms—has raised serious questions about the UK’s ability to operate alongside NATO partners in future conflicts.
Industry figures warn that losing Leonardo’s Yeovil facility would mark the end of an era for British aerospace manufacturing. Helicopter production at Yeovil dates back to 1948, when Westland Aircraft began manufacturing licence-built Sikorsky helicopters. The site has since produced iconic British military aircraft, including the Lynx, Sea King, and more recently the Merlin and Wildcat helicopters currently in service.
Beyond helicopters: Leonardo’s wider UK presence at risk
The implications of Cingolani’s warning extend far beyond Yeovil. Leonardo employs over 8,500 highly skilled people across nine UK sites, from Southampton in the south to Edinburgh in Scotland. These facilities support critical capabilities including communications, radar systems, infrared detection and countermeasures, electronic warfare, and cybersecurity.
In his letter to Healey, Cingolani warned that the absence of new UK defence contracts would force Leonardo to reconsider further investment in areas such as electronics and cybersecurity, in addition to core helicopter manufacturing. This could jeopardise programmes such as BriteCloud electronic warfare decoys—technology deemed so capable that the United States is purchasing it to protect F-35 fighters.
Leonardo’s UK R&D investment has doubled since 2018 to around £500 million annually, supporting work on artificial intelligence, data fusion, and uncrewed rotorcraft technology. The company sits at the heart of the UK’s combat air capabilities, from Tornado and Typhoon to the future Tempest programme, with these programmes accounting for over 80% of all UK defence exports.
Political response v. industry frustration
The Ministry of Defence has in the past sought to downplay concerns, with a spokesperson stating that officials are “continuing with the established procurement process” and that “the MoD is working at pace to deliver equipment for our Armed Forces, back UK companies and create jobs across the country.” Defence minister Luke Pollard reiterated that whilst Leonardo’s bid had been assessed, the process remained commercially sensitive with no details on aircraft numbers, delivery schedules or contract value yet available for disclosure.
However, industry dissatisfaction over the lack of contracts has been particularly strong since the release of the Strategic Defence Review in June 2025, which explicitly encouraged investment in UK industry. Defence contractors and their employees see a stark disconnect between government rhetoric about supporting British manufacturing and the reality of procurement delays.
A test case for UK defence industrial strategy
For Leonardo, the Puma replacement contract represents a critical test of whether the government’s pledges to increase defence spending will translate into sustained investment in Britain’s defence manufacturing base. Industry figures warn that the outcome could define the future of sovereign helicopter production in the UK, with Yeovil’s fate hanging on a single ministerial decision.
The broader implications are arguably profound. If Britain cannot maintain even a single helicopter manufacturing facility despite being one of the world’s largest defence spenders, it raises fundamental questions about the government’s commitment to industrial sovereignty and military self-sufficiency. For the thousands of engineers, technicians, and contractors whose livelihoods depend on Yeovil, the answer cannot come soon enough.
Defence sovereignty is a topic of concern. “If our companies are no longer sovereign, the task of defending Great Britain becomes much more difficult, even if their ownership lay with our strongest and closest partners, such as the United States,” states Lewis Bailey Founder and Chair, Labour Tech.
Bailey poses the risks:
Imagine HMS Queen Elizabeth having its navigation being turned off at the whim of a foreign power. This is a clear and present risk if we do not invest in and protect our defence industry.
He also calls to attention the lost sovereignty of home-grown talent: “Our contributors are renowned thought-leaders in their fields and witnessing our slipping sovereign capability at the coal face. Their companies are British-based and British-owned, employing thousands of people in high-quality, well-paid roles, expanding apprenticeships, and keeping Britain safe.”
Make or break moment
With a decision expected before year-end, the clock is ticking on what many see as a make-or-break moment for UK defence manufacturing. The message from Leonardo is clear: further delay or cancellation will have consequences that extend far beyond Somerset, potentially unravelling decades of investment in British aerospace and leaving thousands of skilled workers—both permanent and contracted—facing an uncertain future.