It is a broad statement and relies on the good people having a good or at least neutral support situation around them. Good people can have health problem or have people they are supporting in rough situations. The net result of firing them will be "bounce down" or "bury".

As an employer you should do what best for all the people at the company, but do not kid yourself into thinking "good people" will recover and move on to a better place. It might happen and they will go on to fortune and fame. It might also be the final brick in the wall. That is just a nice way of making yourself feel better in this situation.