Yes, GP's description is incorrect (to be kind, it's just bullshit). If the position is removed (say H-60 maintenance at some base is now contracted out) then the enlisted members doing the work would not switch to contractors over the weekend or even over the span of a few weeks, they'd be moved to another base or another job on the same base.

Now, the people being hired by the contractors are often former enlisted maintainers, but it won't be the ones doing the job previously because of a switchover like this. Those crews will have PCS'd.

Sometimes they do but often they quit because the work life balance is much better.

They're dismissed due to a reduction in force.