Same happens at ‘struggling’ companies like Deutsche Bank fe. The media presenting massive layoffs while having first-hand information of very well paid contract gigs. Perhaps there are accounting benefits to contracting?
I may be inaccurate on the precise accounting terminology, but essentially a full time employee is a recurring cost, while a contractor is a non-recurring cost, and this makes your books look a lot better to those who aren't paying close attention.
During that period of time, it certainly felt that your job was a lot safer if you were a consultant vs FT. They also paid those contractors by the day, not the hour, and it also felt like they kept the FT'ers around for the "free" labor they provided for weekend work- How I even investigated that 70% number is that I was in theory at least relatively high up the totem pole, but got doing real drudgery type weekend work- checkouts after network upgrades and such since my team had so few FT people. I then mucked around with our api a bit and got the actual numbers and saw this wasn't a unique phenomenon to my team.
However I’m not an accountant so that’s only what I heard from my clients when I asked them why for example they don’t hire a full time employee for a long term project.
Why wouldn’t an employee add to the value of a piece of software?
Also why would a contractor paid 10k add 10k to the value of the project and not 0? Or 100k?
Would a company having a bigger than avg contractor-to-employee ratio be a red flag? As to be overvaluing their assets?
2) No FTE associated benefits (health insurance, 401K, etc.)
3) Easier to terminate
4) (Arguably) Can grind harder
Hopefully, some of the recently laid-off employees can get re-hired as 1099-contractors. Sometimes working as a 1099 can actually be more lucrative (sometimes much more) than being a FTE.
If you have a spouse to provide benefits and hire an accountant to setup things properly, you can make very good money as a contractor. Even better if you can work part time for several with a high rate and juggle them around - then you start outsourcing some labor, and before you know it you have a consulting business.
If going the contractor route--and if the pay is six 000s+--I would highly recommend getting an LLC and all the great tax benefits that provides. Easily adds 5-10% (if not 20%+) to your bottom line.
You will most certainly be a W2 contractor through some middleman who takes a nice cut. Even for higher-end consulting talent. No big company is willing to risk contractor misclassification lawsuits anymore.