Yeah, "we hired people we shouldn't have so now we're going to make it increasingly unpleasant to work here" doesn't work. First-hand, what I've seen happen is that your most talented people, who are the most in demand, leave the organization quite quickly because they correctly realize they don't have to put up with this bullshit. It's the coasters who fear they'll never land an equally cushy job who attempt to ride…
But that's not what Meta is saying. The goal isn't just to make it miserable. The goal is to raise the expectations and hold people accountable throughout the company.
The exact quote "Realistically, there are probably a bunch of people at the company who shouldn’t be here" is hard to argue with. Every company that went on a hiring spree during the last bull run has collected some percentage of people who aren't performing or aren't qualified. Raising expectations and holding people accountable is a reasonable approach, IMO. Much better than just firing people.
Give people a chance to meet very clear expectations and fair warning when they're not. Remove people who can't or won't catch up.