From personal experience (and admittedly stale by some 8 years), IBM had lots of contractors doing software development alongside full-timers. It was a pretty insecure position to be in because they would take the brunt of layoffs, and many I knew were gone by the time I left, with a couple of exceptions. Many were ex-employess who had been previously let go or were retired. Some were not, and all were basically indistinguishable from regular developers... they just happened to fill a req that merely funded a contractor instead of a full-time employee, depending on how the money was handed out to departments.