severance pay is given out for layoffs and not firings. It always seemed like a weird system to me b/c if you're laying people off, you're probably already strapped for cash - so you'd try to find an excuse to fire the person.
Yes and no... if your fiscal management is that shoddy that severance is a problem, you're beyond screwed as a company. The idea is that "Well, we're running down our funds, best to get these people out the door now with x month's salary, rather than hope something turns around in x+y months."