The oddball thing here is not that people are being let go so that a startup can recapture their unvested stock (as you note, this happens all the time, for reasons both good and bad) but that a company would create what amounts to a "hit list" in order to systematically pressure employees to surrender shares on threat of being fired. The company-wide message to employees is, in effect, "we lured you to join us with promises of a high upside via this stock grant in case we succeeded but, now that this has come to pass, we think you are getting a windfall and want a good part of it back." Since employment is at will, this tactic can be effective in reducing the equity base and maximizing value for other shareholders in the company. But at what price? This effort is being driven by a CEO who is clearly dominant, holding almost 40% of the voting power in the company and using it, for example, to cause the company to buy back nearly $110M worth of his personal stock pre-IPO. The overall effect, then, is one of a leader who appears arbitrary and unfair to those who were there early on. While cashing in for himself, he is "clawing back" on others. It might be legal but it just plain looks bad and would hardly seem to be a good way to motivate people or to keep strong people in your company for the long term.