The origin of “炒鱿鱼” is a perfect example of how vivid imagery shapes the Chinese language. It's believed to have originated in Guangdong province in the mid-20th century. In those days, many migrant workers traveled for jobs carrying their own belongings, most notably a bamboo sleeping mat and a quilt rolled together. When a boss decided to fire a worker, the worker would have to roll up their bedding and leave the premises. Someone with a keen eye and a sense of humor noticed that a squid, when thrown into a hot, oily wok, immediately curls up. Its tentacles roll inward, forming a shape that looks remarkably like a worker's rolled-up bedding. This visual metaphor was so apt and memorable that “stir-frying squid” became a popular euphemism for dismissing an employee.
This phrase is overwhelmingly informal and is used in spoken language or informal writing (like text messages or social media). You would never see this term in a formal termination letter.
The connotation is negative because losing a job is bad, but the phrase itself injects a bit of colloquial color and lessens the harsh, formal sting of words like `解雇 (jiěgù)`.
This is the most critical nuance for learners.