The whole point of using contractors is you can drop them at a moment’s notice.

Why would you bother predicting labor demand in the future? That is the contracted entity’s problem.

That's an interesting point. It's one of the differences between US hiring practises, and other countries.

Here in Australia, when you're a contractor you have a fixed employment term. That can be extended, depending upon the contract.

If an employer decides to cut short the contract (without real cause), that can be an actual problem for the employer.