Sales people are really good about selling themselves, but generally not so great at actually selling the thing you are hiring them to sell.
You could say that's bad planning, you could also say it's throwing spaghetti at the wall to see which sales person sticks. Data gathering, if you will.
Letting those many people go would mean spending too much money on replacements, that probably still won't sell their quotas.
in the essence, you market analysis (value generated to customer, willingness to pay, potential market size is wrong.
As you said, this looks like a business model failure, not a sales failure.