You've stumbled upon the perceived-lowest-risk way to fire tech people. It looks better on the books when people churn "organically" over the course of a year.

You've stumbled upon the perceived-lowest-risk way to fire tech people. It looks better on the books when people churn "organically" over the course of a year. Is it better or worse for morale than a lay-off? Hard to say. Depends on how transparent with salaries your company is. One "advantage" is that it's somewhat-reversible. If 2 quarters into this plan, the board finds that they don't need to cut back on spending as much as they originally believed, they can hand out raises to whatever fraction of employees remain, and give themselves a pat on the back. Bottom line, it's a symptom of a poorly-planned hiring system, IMO, and a painful situation with no painless way out. Employee X may prefer to be told directly that the company wants them gone next month, Employee Y prefers to save face. Your CEO is, in all likelihood, very upset about the situation, too, for what it's worth.