Plenty of companies have quarter to year-long contract-to-hire paths for all new hires. Are all of these companies also failures? This is how all skilled work was for centuries, if not millennia. Were all businesses and guilds back then failures as well?

Either way you seem to be missing the point-- being able to choose who you retain vs. who you fire is a factor of applicant volume, not some objective measure of the quality of a company/hiring practices. Being able to reject more candidates if anything means you are better, as you have enough applicants who want to work there that you can be selective.

So basically what you are saying is with the way this bakery hires/fires and the way Microsoft and Google hires/fires - while there might be some slight differences between the two - at the end, the overall effect is the same.

And that what's really happening here with this no-interview no-skills-asked-for open-hire policy (and its high turnover rate), is that they are keeping the cream of the crop and shedding the wheat from the chaff.

It could be.

The difference is interviews reject people based on what's on the paper, and in-the-interview tests are usually limited enough due to time constraints that you can't get a good picture of a persons proficiency.

If you give anyone the chance to show their worth in a 10 month program, that's sure as hell a lot less discriminatory and IMHO equates to a more qualitative hire.

Sure you can only keep the amount of people you have openings for (in this case 35%), but you are very certain you hire the person you want working for you, and not the person with the shiniest resume.