No, it's not firing. Firing would be telling that employee their attitude and/or output made them a bad fit and it was time to go. This is the manager explain

No, it's not firing. Firing would be telling that employee their attitude and/or output made them a bad fit and it was time to go. This is the manager explaining that unless that changes, it will be time to go, and giving the employee the choice between changing it, or a gradual way to leave that benefits both parties. It's not rationalizing anything. It's being responsible to her position (keep the best people working in the best environment possible) and to her employee (treat employees with respect even if they don't fit)