It's like they want to go, and their employer is letting them. They're straining at the leash to be unemployed, and the employer graciously releases them from the burden of their contract.
They're being fired.
My all time favorite ridiculous doublespeak is "we reached out to the employee and let them go". I heard that once from a company's pr dept. after firing a worker due to some public scandal.
Let go is a euphemism for made redundant/laid off. I do agree that it is a euphemism.
> if you want to sidestep that, you'll have to compensate the employee quite heavily
That makes it less attractive to fire an employee, but still potentially worth the business' while in some cases. It feels like it's tipping the balance slightly more in favour of the workers, and doesn't inherently seem wrong to me.
For example I work in a non-union company, and if I have children and you have none, you get laid off before I do. Regardless of who's "better" and who's been there longer. That's in Germany; I would assume, say, France and Spain have much stricter rules around layoffs.
EDIT Re-reading this I realised I missed some perspective. A key ingredient related to hiring and firing in the society I want to (and do) live in is that when someone loses their job they have unemployment benefits that cover a significant fraction of their salary. This gives them time to find another job and makes losing your job a much less traumatic event.