Driving out employees and replacing them with contractors? Ugh. Please tell us who this company was so I can avoid needing them for anything important.
Most of the contractors we hire are Indian as well - it's not particularly race-ey, it's just capitalism at work: subcontracting rolls downhill - a bunch of people who make $40/hr pay $100/hr to borrow a guy in Mumbai who earns $20/hr, and usually isn't employed directly by the company we hired, either.
(Needless to say, we don't outsource a lot if we can help it.)
IMO, if he were racist, he'd be getting requisitions opened and filled with MORE of his friends.
1) A manager who has two cronies is old news. Cronies are always the same race, gender, alumni, frat, socioeconomic background, etc. That's how they become cronies. (It's a good gig if you can get it.)
2) A manager with 100% turnover is signing his death warrant. Unless it was approved beforehand, he's going to be gone swiftly.
3) A manager who subcontracts everything is a manager who was hired to reduce headcount and preside over the closure/disbanding of a department, probably.