There are many cases where the contractor has promised not to lay off employees and done so immediately after the contract is signed. Many contractors make profit because they often sell their products with their service. This often involves the purchase of materials that are not needed. Contracting out often costs much more than keeping a service in house. Profit and corporate overhead have to be written into contracts.
Taxpayers ultimately foot the bill.
Contracting with companies outside the community, which is a common practice, take tax dollars out of the local economy. Local supply contracts are often cancelled after the contractor arrives on the scene. This means a loss of business to local suppliers. Contractors save money by cutting services. Cutting services affects the school environment for students.