I didn't find it stressful. Partly because I was never in danger, and partly because I knew what I was getting into. But I think it's a bad practice, mainly because it just doesn't work. Empirically what I've observed is a bunch of people in the wrong role, not the wrong company.
It's expensive to fire people: companies could save a lot by making lateral moves easier, and doing better internal matchmaking. As in matching people <--> responsibilities, not like... dating :).