Out of all of the layoffs, I don't really consider this one news worthy, or even Halo/Microsoft adjacent.
I contracted for 10 years or so as an engineer. This is just part of the job with contracting. If a big project finishes up like infinite you have so much time to land on a new project - or that's it. It's kind of sad, but it's not as traumatic as a layoff. Contract and project are up, company would love to keep you but there's nothing they can do.
Now, Microsoft using contractors vs FTEs, that's something that can be debated