In chapter 7 of "The Great Gatsby," why does Gatsby fire his domestic staff? Who does he use instead?
First, let's answer the question about why Gatsby let all of his servants go with a couple of quotes from chapter 7:
“I hear you fired all your servants.” (Nick says,)
“I wanted somebody who wouldn’t gossip. Daisy comes over quite often—in the afternoons.”
"My Finn informed me that Gatsby had dismissed every servant in his house a week ago and replaced them with half a dozen others, who never went into West Egg Village to be bribed by the tradesmen, but ordered moderate supplies over the telephone."
So there you have it. Gatsby ditched his faithful servants because he was afraid that they would gossip about his clandestine meetings with Daisy at the house.
Now, for the second part of your question, "who did he replace them with?" Again, a couple of quotes illustrate this nicely:
"The grocery boy reported that the kitchen looked like a pigsty, and the general opinion in the village was that the new people weren’t servants at all."
“They’re some people Wolfsheim wanted to do something for. They’re all brothers and sisters. They used to run a small hotel.”
And there you go, answer number two. He replaces his servants with some shifty characters that Wolfsheim owes a favor to. They used to run a hotel, but don't anymore (probably because, according to the previous quote, they were lousy at keeping things clean and had bad manners.) These "replacements" know how to keep their mouths shut, and they are not locals, so they have no one to gossip with. Thus, they are of much better use to keep Gatsby's secret love-nest a secret.
There are at least two reasons why there has been a dramatic turnover in domestic staff at Gatsby's West Egg estate. Gatsby's covert affair with the married Daisy Buchanan has begun in earnest, and he is not ready for word to leak out and make public what they have together. His desire for privacy is not made explicit, but it is reasonable to think that until Daisy has agreed to leave Tom and marry him, Gatsby does not want Daisy to feel pressured or potentially embarrassed by others' expectations, including her husband's. Their reunion has just begun, and Gatsby wants to protect it. He dismisses his staff because they are locals and he fears that they will gossip.
Gatsby hires a new staff that has come recommended by his associate Meyer Wolfsheim. Because anyone working in Wolfsheim's world knows that indiscretion could have potentially serious personal consequences, Gatsby feels confident that they will not talk. Moreover, since they are outsiders from New York, they are not connected to the local gossip scene in West Egg. And when Gatsby is later shot, the servants don't react to the sound because they have likely been trained to mind their own business.
From a purely practical standpoint, Gatsby understands that he no longer needs a large staff because he is no longer entertaining on the scale he once was. Now that he has secured the attention and affection of Daisy, the need to show off his wealth and popularity has evaporated.
When Nick goes to visit Gatsby at the beginning of chapter 7, he is greeted by a "villainous"-looking, unfamiliar butler. This surprises Nick, as does the man's rude behavior. Later, he hears from Finn that Gatsby has dismissed all of his servants and replaced them with people who "never went into West Egg Village to be bribed by the tradesmen, but ordered moderate supplies over the telephone." Evidently, then, Gatsby does not want to facilitate a go-between of information between himself and the village. He is, perhaps, borne out in his opinion of the village as a hotbed of gossip by the fact that this precise village gossip informs Carraway (not with any stated foundation) that the new servants "weren't servants at all."
Later, when Carraway brings up the subject with Gatsby, Gatsby confirms that he wanted servants who would not gossip, because "Daisy comes over quite often." Carraway wryly infers from this that "the whole caravansary had fallen in like a card house at the disapproval in her eyes," suggesting that Daisy's opinion now holds sway over Gatsby and, as she did not like the behavior of the servants, they had to go.
Gatsby goes on to inform Carraway that the new servants are "some people Wolfsheim wanted to do something for. They're all brothers and sisters. They used to run a small hotel."