As a junior software engineer, I worked at a large UK bank.

Senior management routinely seem baffled that they could announce redundancies or hiring freezes, yet technology costs would continue to rise.

One pattern I saw repeatedly was a contractor being let go, only to return via a large outsourcing provider. The provider must have added a substantial markup despite supplying the same engineer back to the same team, without having incurred any procurement costs.

I once asked a more senior colleague how this made any sense. His answer stuck with me:

"You can’t stop people from doing their jobs. If someone thinks their job is to deliver X, they’ll find a way to deliver X. Sometimes that means working around processes and incentives in ways that look very strange from the outside."

when i worked for an australian bank, one co-worker in a nearby team had been working on the the banks systems as a sysadmin for over a decade.

the bank would go through cycles of "we need to reduce our headcount and outsource everything" and then 4 years later "we need to reduce spend on contractors and retain more knowledge and expertise in house". he'd survived multiple waves of it, switching back and forth between being an employee or a contractor through some external agency, as management trends changed, while essentially doing the same job.

I've seen that in a large management consultancy company. Part of their risk management procedures (both for the company and in terms of some EU law) meant they couldn't keep contractors for longer than x years. They'd have to convert to employee or separate for 12 months.

Bit that doesn't really work in knowledge systems. Even with the best documentation people will build up knowledge that no one has, and their departure is costly.

Equally at the end of their contract a lot of time will need to be spend on a handover which slows down others even more.

So what happened? The contractor went via another middle man, which checked the correct boxes on the form, and everybody was happy.

That's because the bankers didn't realize they're not in the banking business anymore - they're in the IT business (which has a focus on tracking money).

I think I have a simpler answer: quarterly results.

Management just really needs to make the next earnings look like what it should look. Next quarter is next quarter's problem.

> Senior management routinely seem baffled that they could announce redundancies or hiring freezes, yet technology costs would continue to rise.

I dont think they're baffled, they just trying to show they're attempting to keep costs under control.

> One pattern I saw repeatedly was a contractor being let go, only to return via a large outsourcing provider.

That's 'normal' in Canada and France.

The military is like this. Higher Headquarters decides to contract out maintenance and logistical support for $aircraft_fleet. Uniformed maintainers go home in Friday and show up Monday making a lot more money to do the same job but without risk of getting posted or deployed.

Contractor fees come out because of a different pot of money, so perverse incentives abound.

This doesn't seem to answer why an engineer is let go and gets rehired through an outsourcer.