[marcus_holmes]

I've seen this happen because of accounting/corporate finance policy.

Payroll is an ongoing commitment. Consultancy is a temporary service. Moving people from payroll to consultancy means they can reduce overhead in financial projections. Even though consultancy costs more, and employs the same people, it makes sense to do if it means you can convince shareholders and analysts that Opex will shrink in the future, and therefore profitability increase, and therefore the share price increases.

[jimnotgym]

Also because of corporate policy. I know of a company where the VPs are heavily targeted on headcount reductions. Contractors are not headcount.

[pyuser583]

The problem arises when moving someone from payroll to consulting creates the illusion they are not necessary.

[cwillu]

> if it means you can convince shareholders and analysts that Opex will shrink in the future

Isn't that just fraud?

[scott_w]

No. Fraud is a much higher bar than making a prediction about your plan for the future that may or may not pan out. There’s no deception here, management fully intend to end the contractor relationship in future, whether they’re able to or not.

[consp]

A vague promise which you pretend to beleave and can make believable to other is just business advice unfortunately.