@AC
I don't think you can complain about morals when you're dealing with contractors. I know some very good contractors, but a large proportion of those than I come across are jokers, not particularly well skilled and claim to have done every single technology that they've read about. Contractors need to understand that they can't have their cake and eat it - i.e. you get paid well in the good times so that they can ride out storms like this - and a cut like this ain't the end of the world.
Also, FYI, the cuts are only on certain projects (the less critical ones).