This, simply put, is not the case. The Chief of Air Staff put out a memo in 2008 stating this and the case for FE's has only grown since. The rumour was that with the retiring legacy fleets, the newer models would not need FEs so the trade would become defunct. The C 17 and new C 130s do not have FE's on them and that was the beginning of the rumour. The C 130J is now very close to bringing back the FE position as well, by the way.
Military choppers will always have Flt Engs aboard as well. Ask any pilot the value of an FE and you will understand how necessary his FE is. I can assure you that the FE position is not going anywhere!
HH