Well, heavy use of contractors is typical XGS' MO to avoid taxes and long-term benefits. There were a lot of earlier musings in the industry that XGS is basically unwilling to properly hire people and like to sign them as contractors because it works for big IT, so it must work for games. Except it don't.
Part of the reason why Xbox Pipeline is a mess is a fact that they can't plan long-term and can't hold people for the proper amount of time for the future game to gestate with a stable core team (I still find the whole story around Pefect Dark and The Intiative fiasco thoroughly amusing). CoD formula (and Blizzard, albeit way slower) is based around monumental piplenies, rock-solid studios with know-how and huge key staff retention, because those people know the work of the conevyor belt and how to tweak it.
Good luck messing up this machine that Kotick built for 20 years to shave some miniscule (for the MS) tax money.
After this set of layoffs I'm convinced that this company will never brute-force into gaming and always be a laughing stock because MS doesn't understand the very basics of the creative industries. Xbox doesn't care about people making actual games. It cares about brands husks and names. Hence why we've got entire studios created to support just one husk of a franchise after the original creators left to do something more interesting. The whole Idea about something like 343 (that is heavily relying on outside contractors for literally anything) was kinda inane to begin with, it was just an entity that never understood Halo because the idea behing the collective was never creative to begin with.
CoD still looks too big to fail, but so was GoW and Halo a few years back. MS will find a way to f everything up, don't worry!