Agreed on your first point, not on your second point. Lots of tech companies did over-hire during the pandemic in a way that had entirely foreseeable results, but everyone simply got caught up in the FOMO.

On the contractor front though, you aren't going to remotely get the best and brightest by going that way, not unless you're actually contracting with industry leaders who are going to be charging way more than FTEs will cost you (and there aren't that many industry leaders). There are so many good tech companies out there offering FTE positions, so a company offering a lower-paid, lower-benefits contracting positions is simply not going to be competitive in the labor marketplace.