The problem isn't that they are cutting 5%, it's that they use stack ranking. Within a team of 10, you may have the top 10 performers in the whole company, but

The problem isn't that they are cutting 5%, it's that they use stack ranking. Within a team of 10, you may have the top 10 performers in the whole company, but the manager still has to rank them and assign at least one of them the bottom ranking, or engage in a lengthy battle to defend their high rankings. They're not actually finding the bottom 5%, they're giving managers an excuse to get rid of people the don't like for whatever reason. It's also terrible for morale to do it all at once. Sure, maybe there are some underperformers. Let managers deal with those people individually. Don't do a mass layoff where they have to select someone at a specific time when all their people might be doing well.