Yes, my company hires most of our entry level and lower tier (techs and such) IT personnel as contractors. An important distinction though is that we don't actually hire them. We sign a contract with a third party staffing agency that actually hires them. From our point of view they are contractors, but they are actually employees of that third party agency.
It's very important though that you understand what exactly your status is because the whole point of our hiring contractors like that is so that we can circumvent various labor laws, we don't pay unemployment insurance or payroll taxed, etc. If you are a legit contractor you are responsible for all that, but if you are an employee your employer is responsible for that. You don't want to find out at the end of the year that you owe some huge tax bill.
Plus, even if you are an employee, they may try to treat you as a contractor and hope you don't know your rights. An example would be not paying overtime and hoping the employee doesn't know the difference, etc.
The most important thing to remember is that the determining factor isn't what your "company" says, it is what you actually do. They can call you a contractor if they want but if they are dictating your pay rate, your hours, your supervisor, etc, you're an employee not a contractor.