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It absolutely happens. I worked as an early employee at a company for its first 11 months … the founder was the main investor and a serial entrepreneur. He clashed with the CTO from the start and progress stalled … after a major disagreement, he decided he would rather sell the company to a competitor than continue to deal with the CTO. At the 11 month mark we were all told that we were fired, the company was shutting down, and and if we wanted severance, we’d have to sign away our rights to any claims from the sale.

Companies do let people go to avoid granting stock. Banks also do it to stiff employees on their bonus. For startups it’s a forcing function to decide if they want to keep someone. (I’m not saying this is right, just explaining why it happens)

Happened to me.

How do you know that was the reason?

Downvoted for asking a question?