Using newly matched U.S. defense contract and restricted administrative employment data, we show that the employment effects of defense procurement are costly, concentrated, and slow to diffuse. Employment gains are initially driven by large existing contractors and come at a high cost of approximately $290,000 per job-year. While employment in non-contracting firms is crowded out on impact, positive spillovers emerge gradually and account for half of regional employment gains by the third year after a spending shock, suggesting delayed but persistent medium-term gains across industries. Within contractors, only 15% of job creation occurs at recipient establishments, highlighting the role of supply chain linkages.