My Fault, but You Get Punished
There is a lot to unpack in this story, so settle in. Firstly, the OP, who held a managerial position, was told to fire an employee by their higher-up because they were a distraction at the office. The problem was that the employee was one of the most beloved members of the team, but still, you gotta do what you gotta do.
Unsurprisingly, office morale fell when the employee was let go. And not long after, the OP and another manager were fired because everyone was having a crummy time at the office. So, the boss created an unfixable problem that led to more job terminations. Good going!