Is that similar to stack ranking, where the “bottom” X% is culled each year? Or is it exactly that? I recall that process being deemed ultimately shortsighted.
Quite a few better ones left on their own. The company definitely lost overall. The next CEO guy came targeted especially this - something along the lines of "we let leavers/retirees go and just don't hire for now". It worked wonders, people were more focused on actual work and job hunting.