As an employer, you don't need to fire contractors. You just let their contract expire and do not hire them again. Very clean, no pain, no conflict, and the contractor many times walks out the door not even realizing you would have fired their ass under different circumstances.

>> but a contractor is nowhere near as productive as a full-time employee

I disagree, also speaking as someone who's seen a mix of runs as a contractor, consultant and staff employee. It's the individual who is very productive or not, not the role they are filling.

Yes that's true. Contractors are often more skilled than non-contractors (they've often older and had a wider range of experiences).

But contractors, like entrepreneurs, are self-serving individuals. If your company has a large codebase and you depend too much on contractors, they may create a 'clan' inside your company and they will have leverage over management. I've seen this happen in large companies, never in a startup though.

I agree though that it's not because they're contractors. It's more because they're greedy.

Yes, I've worked on a few sites where the employees were let go before the contractors.