[iscrewyou]

I would assume contractors are first to go. Work moves in house. In house staff gets cut. The remaining staff gets to work on what the contractor did and what the employees that left did. The company is not beholden to contractors as much as they are to their left over employees. Everybody has got to pay bill. The company will usually look out for their employees.

[briandear]

A company will usually look out for those generating the most value. Which is the point of a company in the first place.

[vlucas]

You cannot assume this to always be true. The company could have a directive from C-levels to cut all contractors plus 10% of staff and retain the rest. You never know. Sometimes there are competing interests that effectively "tie the hands" of managers to make the most logical choice.

[maxxxxx]

It's more about budgets and survival politics. The people who are setting the budgets have no idea who is generating most value.