First, companies should go through the process of attrition (early retirement incentives, hiring freezes, etc.). Then I think companies should take a page out of the Survivor TV program script. For those of you unfamiliar with the series, it is a reality game show. The contestants use a system of progressive elimination. Each contestant votes to eliminate others. Usually, the jerks and unproductive players are eliminated. That seems fair to me.
Here is how it would work. The process is based on the assumption that the employees know their peers and leaders better than management knows them. Each employee would select five (more if needed) employees that they think should be fired for whatever reason. The reason doesn’t matter. The HR department would tally the votes, and starting with the person with the most votes, lay people off until the appropriate number is reached. This process would eliminate most jerks, brown-nosers, egomaniacs, back stabbers, bad team players and goof offs. Companies may opt for a ceremony such as extinguishing a torch (clearing out an office, desk or locker) or handing out roses (pink slips?) but I think that may be a bit cruel.
This has to be better than the current system used by most companies.