I’m thinking it’s because they aren’t firing people at random. They’re letting go their weakest performers. This is very common and has been encouraged in business for decades:
https://www.inc.com/paul-b-brown/should-you-fire-10-of-your-...
From what I've seen of large corp. performance appraisal systems, that's very rarely the case.
Those systems tend to reward people who are good at self-promotion, not necessarily people who are good at their jobs.
With that said, in large companies it can be very hard to determine just who is below whatever standard is set. Instead it becomes more of a game to be liked by your manager or claim credit for work.
By the way, part of working at or above a standard also includes not being an asshole.
So stack ranking (or any kind of ranking by criteria) tends to nudge people into "let's do what the standard expects us to do" instead of "let's do what makes the team, company and product improve."
https://www.inc.com/paul-b-brown/should-you-fire-10-of-your-...
It's a short article so maybe a little leeway should be given, but it is nuts the way the author equates reviewing employees and firing employees:
You don't have to a rigid rule, such as fire the bottom 10% every year, but you do want to be reviewing your entire workforce (at the very least) once a year, with an eye toward constantly improving it.
You should be reviewing your employees a lot more often than once a year and it doesn't need to result in anyone getting fired. Reviews are a more effective process - especially in the small company environment the author is talking about - if nobody ever approaches them like that (with the expectation that people will be fired).
Not in places that I have worked. Weak performers still have jobs years later, yet decent performers have been sacked quickly at other companies when they were struggling with money.