Earlier quoted context omitted.
Because low-performers are nearly impossible to identify, at least from a CEO level. There are two things one can be doing in a job: 1) Their job 2) Signalling to everyone around how much they're doing, and how hard it is Universally, as you shift from camp 1 to camp 2, your job security goes up. There is no such thing as perfect transparency, and especially in careers like programming, it's hard to estimate how hard…
Every IC has their direct manager: team lead or something like that. Every decent manager knows who is underperforming in their team and secretly dreams about firing the slacker and hiring someone better instead, but rarely has such freedom. Now, the layoff is suddenly breaking. It's a no-brainer to jump the train and finally make it for the sake of the entire team.
- Grumpy. Grumpy doesn't like you, and you don't like Grumpy. He doesn't keep you updated, and seems to sit in an office with a closed door. He complains a bit.
- Happy. Happy is your best friend, and tells everyone what a great manager you are. If all your employees were like Happy, you'd have perfect job security!
- Cheery. Cheery goes out and showcases all the great work he's doing to everyone. Everyone believes Cheery is the heart of the team.
- Praisy. Praisy is a good friend, you have kids in the same school, and you go to the same church. Firing Praisy would ruin a lot of relationships.
- Toss in six more caricature personas.
You cycle positions every 2-3 years in the company, and so no one can really tell how good a job you're doing from output except by signalling.
Your boss tells you that you need to fire 20% of your team. Whom do you fire? Whom do you keep?
If, as a CEO, you could count on every line manager and tech lead representing you, this might work. In practice, line managers and tech leads want to keep their jobs, signal the work they're doing, and keep their friends. They might also not be following their reports' work directly, and might not know whether Grumpy is the heart of the project (where this post started), or is in fact just playing video games.