Contracting out, short term - a way not to show up on on the government radar in the jobs & lay-off reports. Company benefits: Not paying severance, MR75, benefits, lower pay per task & someone else’s HR has to handle. Also, doesn’t have to explain where the job creation went after, the huge corporate tax cuts in the billions.
Long term - this has not worked well for the company in the past. As time goes by you lose experience, innovation, quality, loyalty, prioritization, & a disconnect from the company mission.
Employee either accepts the move or quits & loses any hopes of a little (month) severance. On the positive it’s gives the employee time to dust off resume & job search while still employed & training their replacement,