The best way to let people go is to let them know when they're hired that it's an uncertain environment and that their job is always at risk and even if you let them go, it's not that you don't love them.
You spend all this time, as a child, coming up with these fantasy stories, and here I am, sleeping in a treehouse, in the middle of Canyon de Chelly, shooting a Western. That's a bit of a once-in-a-lifetime experience.