I had to be blunt on this!

It was that transient moment that I forced myself to speak out that words, even though I was aware that these words could hurt him. "John, you have done a very good job so far for our company," I said to him sympathetically, "But a piece of news that I hate to break is that the situation really forces me to dismiss you." After saying this, I knew that I had been terse to John. "I know that is what I will get at the end of the day, but don't you want to sleep on this decision for a few more days. After all, I have been working here all my life," John angrily replied. "Well, John," I pat him "The gist of the story is that we are running out of fund to support more stuff. So we need to lay off some." It was not the most cogent reason, I knew, and it was an acute pain to lay off such a good stuff like him.