SXS needs pilots
SXS is growing and looking for pilots, both F/Os and Captains. Even with the DGCA's ambition to reduce the number of foreign F/Os SXS has kept all of them (exception: Some FOs had the option to go directly to THY) and will employ even more flight school graduates.
I am not an expert here but until now I have heard of nobody being fired after 1 year just based on some policy - as I said, they need even more pilots (this excludes possible terminations of contract due to low performance - I don't know of any such case but maybe there are some).
My personal impression is that flight school graduates see it as a good investment to pay for their type rating and then fly at least 500, most probably many more hours at SXS on an aircraft that is one of the most popular on the globe. Their alternative is either going to Indonesia or waiting for aviation in Europe to recover from the economic crisis.
After some years, yes, SXS may manage to replace those foreign F/Os with locals. But then the pilots leaving will have a good experience and nice reference on their CVs to continue their careers at other airlines which would have never given them a chance as fresh graduates.