re: Firing people: High stress project, you gotta go

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Any way to sugarcoat this?

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Yup! Let them know that its obvious to you that they are not happy with their jobs, or else they would be cutting it, and a new challenge is exactly what they need and it will make them happier. Let them know it might be tough at first but within a couple of months they will be much happier and their family will thank them for it. I would try to get them to quit first by saying that and if they don't you have to let them go.