This often does happen along with layoffs when a company is in real trouble. A problem of silicon valley culture is that you basically can't fire anyone for underperformance, so you need to have these sorts of layoffs as a prophylactic measure to cull the heard. So that means you get a cycle of "overhiring" followed by "layoffs" and that is working exactly as intended.
California is at will, you can fire anyone for anything or even nothing. I'm yet to see poor performing executives take themselves out before they take out the people that actually create value. You don't need to have layoffs, you need better leaders, and they're the last ones to get culled, usually running off with bonuses for under-performance and lousy work.
Why is firing someone hurting them when it's not working out? Both the company and the person would be better off doing something else.
We have attached shame and this idea that it is "hurtful" likely because it is so rare. At a place like a hedge fund, firing the bottom 10% of people is relatively normal, so being fired can sometimes just mean "you had a bad 6 months" not "you am a terrible person who does not deserve to work anywhere" (which seems to be how tech people and Europeans think of it). In that environment, there isn't any shame involved in the firing and everyone gets on with their lives (usually including a cushy severance package).
>That would be like throwing out good fruit, when there are spoiled ones.
Have you seen the industry lately? They don't care unless they have leadership who actually has tech experience. The company will float long enough for the next executive to worry about the consequences.
To put it more charitably: They may want to care but there's too much beuracracy to holistically figure out performance, and the stats measured are horrible 99% of the time anyway. So yeah, it all comes down to "vibes". Which is probably worse than random for tech workers. They won't feel short term consequences, so it's not a big deal for them if they lose a few "best and brightest" (they will probably leave after the layoff announcements anyway).