[supertrope]

That's most of the point of the employee-employer relationship. The company pays a flat rate and tries to maximize output reaping the extra output of over-achievers. In return the employee is relatively insulated from business risk (well except for layoffs to juice the stock price).

[pi-e-sigma]

If you can be fired at any point then how exactly are you insulated from the business risk? You are only insulated from the upsides such as record profits etc. All the downsides are still there.

[supertrope]

Compared to freelancing. If you're an independent contractor you have to market yourself, close deals, manage client relations, and of course do the actual individual contributor work. You have to convert a stream of individually unreliable prospects into a steady income.

There's plenty of firms that run at a loss from time to time but don't immediately cut jobs or pay.