> Why is it hard to fire employees?

Because when you are billions-of-dollars profitable, and you go ahead and fire a lot of people, it tanks morale, and good performers start looking for the door. (Note: This does not hold in the middle of a recession. We aren't in the middle of a recession, though.)

Because a company could be just as successful without XY% of its workforce, but nobody can correctly identify which XY%. (This one still holds in the middle of a recession.)

Because a lot of that XY% would be more productive, if they were instructed to do something that's more useful to the bottom line.

In addition to what vkou said, firing individuals for low performance in the US, as opposed to mass layoffs, typically requires putting them through the PIP process (performance improvement plan), which is onerous and stressful for the manager. My limited understanding is it involves the manager, HR, and employee agreeing on a project and timeline that would constitute satisfactory performance, then constantly checking in and documenting progress. The purpose is for the company to collect proof the employee can't perform their job to indemnify themselves.

But I've seen people just temporarily work really hard and/or get lots of help while they're on a PIP, succeed at it, and then revert to old habits. In a lot of cases rather than go through the trouble to put a report through a PIP, which may not have the desired outcome anyway, the manager will just put them off in a corner and give them unimportant tasks, making it that much easier for them to just coast.

Also, doing so demonstrates a failure on the manager's part (How did they let a formerly good report get so bad that they need a PIP? Were they paying any attention to what they were doing for the past year?)