It's #1. Hiring is hard; everyone makes mistakes. Or sometimes people simply don't perform well in certain roles. Their deck goes into detail on this point IIRC. Try to fix it and if you fail, acknowledge the failure and move on.

Acknowledging that you will need to fire some portion of those you hire is an adult approach to the issue. Likewise from an employee's perspective. It's not a big deal to plan for things possibly not working out.