This is what happens when management becomes penny wise and pound foolish.
They say "hey, we can save 20% here". They don't factor in the other costs, like increased downtime, longer times to get stuff done, or the sheer amount of time wasted "helping" them do their jobs.
I was in a situation not long ago in which an out-sourcing company was being brought in. In my opinion, they were largely incompetent.
You'd submit a request to get something installed on 4 machines ... they'd make a hash of it on one machine, and then send you the instructions to install it on your remaining 3 machines and ask you to do it. Sorry, your job is to do all of this, we don't own it. If you can't do it and you expect me to do it, what value do you bring? Once people started refusing to pick up their slack it became apparent they really couldn't do the job.
The problem is the people who make these decisions do not have visibility into how much the associated costs go up as people have to do their own job and the job of the outsourced people.
To then come back after several years and say "we're getting shitty service, can you do this as cheap as the people giving us shitty service" says they have no idea of how they caused their own problems. If you want shitty service, pay the shitty service rates.
The decision makers and accountants are removed from the actual ramifications of their own decisions. Which means they evaluate their own decisions on faulty and incomplete information, pat themselves on the back, and give themselves bonuses for saving money.
In fact what they've really done is fuck up things which worked, make the system work terribly, failed to account for all of the new problems, and then they act as if they've saved the world.
If your expensive staff all have to devote 35% more time to make up for the slack of the cheaper workers .. what the hell are you saving?
If you can't measure your own productivity and effectiveness, and the other costs created by hiring the incompetent out-sourcing people, you have no way of evaluating your own decision. The problem is management frequently has no way of evaluating their own decisions -- and I often suspect that is by design.
And the shortsightedness of this says people are incapable of realizing if you are sacking the cheaper company because they gave terrible service and poor results, you can't go back to the original vendor and expect them to give you good service for the new lower price.
That kind of stuff is at best wishful thinking, and at worst completely delusional.
But then again, many of us think that's what management is for.