this post was submitted on 20 Sep 2023
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Nothing. It’s one of the alluring aspects of using third-parties. You pay a flat fee, people do work. You avoid all the overhead of HR, benefits, workers compensation and unemployment insurance. If you want someone gone there’s no process, you simply tell the third party that Joe doesn’t need to come back to work, ever, and you’re done.
Amazon and Google are not alone in this practice, nor is it exclusive to Fortune 500 companies.
I work as a contractor dev for fortune 500s. It's wide spread. Handful of full timers, padded with contractors.
Brain drain is a real problem, but it also means there's a culture of FTE being willing to jump through corporate hoops and on call hours, because they want to keep the FTE position instead of finding a new job every 1.5 years (in California where there are max contract lengths)
Worst case you pay out what is left on the contract, but since you drove costs down it is cheaper than firing a regular worker!