I recently worked out that a faang salary works out to the same as a fairly average skilled contracting rate (say $1k/day). What is an employer gaining by hiring contractors (who probably receive 25% of that themselves) instead of employing another full time person at 250k per year?
Are there other major costs to company of a full time employee that are significant relative to the salary?
Yes. There's accounting/budgeting/HR jargon of "fully loaded"[1] as in "fully loaded salary" or "fully loaded cost" of an employee -- which is a higher amount that's calculated by the company. The extra costs in a fully loaded salary include health insurance, 401k match, vacation, etc.
Depending on the company benefits and overheard structure, the fully loaded cost could be ~1.2x to 2x the salary. E.g. it costs the company ~$375k behind-the-scenes to pay the $250k the employee "sees".
Therefore, your intuition that $250k salary == $250k billed-by-contractor is actually not an apples-to-apples comparison. The $250k-contractor costs less than a $250k employee. Other non-salary reasons for contractors include having a flexible size workforce -- especially for non-strategic projects. Instead of bad press headlines announcing, "layoffs of X employees", just cancel the contract.
[1] https://www.google.com/search?q=%22fully+loaded%22+salary