Re: What would you do?
If you care about the company and your boss, you should let the boss know so he is mentally prepared to make other arrangements if the employee decides to leave. The guy himself needs to approach the boss if he wants to negotiate and work out some deal.
Employees come and go all the time. At the time it seems like a major set back but once they leave things do go on and others just have to step up to pull some more weight. We have been through this several times over the years and now it doesn't matter who goes, things continue on and sometimes for the better.
BTW, what kind of work do you guys do?