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.