I come from a country where you'd basically have to prove that the people you laid off could not be retrained to do the new roles.

If anything, what is the difference between an employee and a contractor if you can just terminate them once you're done with them?

FTEs in the US get benefits and part of their taxes paid for them. Contractors are not (can be, typically are not).

Getting hired (getting an apartment, ...) is easier in the US as there are significantly less challenges at terminating those contracts by the 'provider' than in e.g. Germany, where it's really hard to fire or evict someone.