“It looks like his contract isn't being renewed.”

You are discussing a coworker who is working on a contract basis, not as a full-time employee. You were told that the company is going to end this person's contract. You want to tell this news to another coworker, without saying who made this decision. This is how you explain.

It looks like his contract isn't being renewed.

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It looks like (something is happening)

This phrase can be used when you're guessing about how something is going to turn out when it's finished:

It looks like the Yankees are going to win this one.

However, it is also used in situations where something has already happened, and you have to tell the bad news to someone:

Sorry, it looks like we had to reject your loan application.

Saying "it looks like" something bad happened is softer-sounding than simply saying that it happened.

renew (an agreement)

To "renew" something means to agree to continue it for a longer time. You can renew contracts, leases, magazine subscriptions, and even wedding vows.

In the example above, the passive structure "being renewed" is used so that the speaker doesn't need to tell exactly who made the decision not to renew the contract.