I worked at Amazon (a while ago) and they both (a) did not do that and (b) what firing they did not, imo, affect morale. If anything the fact that really bad engineers were quickly removed was probably a net positive for morale.

There were a couple of dubious episodes, though, where a bad manager tried to do something to people they didn't like. Sometimes it worked (aka, negatively affected people) and sometimes the manager got in trouble instead. So it's not like all good. But it was heavily dependent on the managers you ended up under.