I never understood why larger companies do this, I.e. either early stage of your career or as a contractor (with some possibility to FTE) and not as directly to FTE if you're a generalist. Companies do at-will employment, but I guess it is difficult to let go without evidence (I.e. performance reviews) though I'm not really sure.

When some of the contractors went FTE at a previous role, their salaries dropped dramatically (though they were paying for their own health insurance through an agency).