I strongly believe that Steve was exaggerating for effect here. In my 17 years at Amazon I have never seen or heard of a threat of this nature. The overall intent of the email was to tell teams to decouple, decentralize, and to own their own destinies.
An ex Netflix person, who has since moved to Amazon, spoke at a client place three weeks ago. He casually mentioned things such as "we forgive the first time, and we fire the second time". From how he spoke, we felt that this may be the norm in Silicon Valley and related places.
I have much respect for what he has achieved, so I didn't interrupt to question such a fear-inducing mindset.
There are compounding productivity boosts available when a team can all trust each other to basically never cut corners or make sloppy mistakes. Removing a tenth team member who is not up to the bar of the rest of the team can make the remaining 9 members each more than 11% more productive.
Of course, this strategy has its downsides. You can't ever hire juniors. You can't really hire people in and train them up at all, because everything has been built under the assumption that only experts will ever touch it. This makes an organization that operates like this inherently parasitic to the industry, only capable of hiring in experienced employees from other companies.
The part about McCord firing an employee is sad and funny at the same time. To begin with, it looks like a page from Vonnegut’s Player Piano:
“McCord mentioned letting go a product testing employee who “was great,” but eventually lost her job to automation.”
It isn’t mentioned if the employee contributed to the automation that eventually replaced her, but it may as well be so.
Nevertheless, her depiction of the conversation is a rare mix of sad and funny:
“So I called her up. I’m like, what part of this is a surprise? … And she goes, yeah, but, you know, I’ve worked really hard; this is really unfair. I’m like, and you’re crying? She’s like, yeah. I’m like, will you dry your tears and hold your head up and go be from Netflix? You’re the–why do you think you’re the last one here–’cause you’re the best. You’re incredibly good at what you do. We just don’t need you to do it anymore.”
Yes, IIRC in Steve's original blog post he points out that that particular point was not in Bezos' email and notes he put it in there for dramatic effect.
What I remember from Yegge’s blog post was that the “have a nice day” bullet point was a joke; Bezos doesn’t spend much time worrying about how each employee’s day is going.
