Please resist the urge to pull the band-aid. I'm not a fan of keeping a poor performer, but unless this person is a behavioral or "for cause" termination, he deserves some professionalism here. 30-day Performance Plan, make the goals aggressive and stick to it - he can consider that his head start to either buck up or start searching.
Remember, your other employees watch how you treat their former colleagues. A quick termination before a holiday is prickish, an aggressive performance plan is taking care of business.

You have the power to make or break this persons holiday - maybe the last one he will get for a while.

What if the roles where reversed? What would you want?

It's only one week...

Performance issues need to be addressed as soon as they are identified. I would not wait. They also need to be carefully documented.

I would have all supporting documentation in hand before you have this discussion.

In my experience, if you are fair with people, you should be able to outline problems as soon as they are identified. A new hire once asked me if we have reviews every 6 or 12 months. My response "we have reviews every 6 hours." But that opportunity does not exist here any more.

If you are worried about network access and security, then maybe take the time to ensure access is buttoned up before pulling the band-aid.

You are only wasting your teams time by prolonging this issue - you've made your decision and taken the appropriate steps- get it over with so everyone can move on

Time is essence in any such decisions. Early discussion to help him to transition is advisable. Such decisions are made before weekend so that your and his week starts fresh. Make sure that the documentation of non-productive efforts are in place.

At Early startup stage its important to make the performance feedback instant and part of the culture. So that it helps people to make decisions including you who are running the business risk.

Assuming you have all of the documentation for the performance issues you've outlined, it is better to make the hard decision to terminate now rather than waiting for him to return. If you have the ability, you might offer to connect him with an outplacement firm to ease his transition. If you don't have documentation of the performance issues, however, you run the risk of increasing your company's liability exposure. If that is the case, I would suggest placing him on some sort of formal performance improvement plan upon his return, documenting specifically the areas where you need to see improvement and a reasonable timeframe (90 days) within which you need to see the improvement, and establish some regular check-ins. Happy to discuss further if that would be helpful.

Do it now. I had to fire someone two days before Christmas and while it is very difficult it has to be done. Treat the person with dignity and respect, focus on the facts and if at all possible they have vacation or something coming that will ease the burden.

I have to disagree with most of the others.

Remove this guy Immediately.

There is ALWAYS a "holiday, sickness, death, marriage, typoon or some other excuse.

Your team is everything, your production and quality will all come down to your weakest link.

Also i assure if you can already see that this engineer takes 5 times longer, then you are paying him 5 times more then you need to. This guy is bleeding you dry.

This in not the 80's or 90's - people move on and change jobs every few months. Most jobs are contract based anyway. Dont get suckered in. I might sound cold, but this is experience, i have given so many people the benefit of the doubt but the trut ish some people have a bad work attitude, and those people have no passion to work towards your goals.