commentator
If you terminate him at this point for poor performance, and you cannot document that he knew exactly what he was supposed to do, had demonstrated his capablity to this job or something very similar in the past, and that he suddenly, at this point, due to something like maybe a change in his attitude, anger at management, in other words, some deliberate decision on his part to screw this up, then he would probably be approved for unemployment benefits.
All he would have to say is that he did the job to the best of his ability, that he showed up and did what he could, and he was terminated because he found it impossible to produce the results you were asking for. This is not misconduct. If he made any attempt to let you know while the project was on-going that he was experiencing problems or asked for help that was not received, this would be more evidence in his favor.
If, however, he made a deliberate effort to cover up on-going problems with the project, deceived you about results, and did not inform management that the job was in trouble until you found it out, this crosses over more into the misconduct area. In fact, this could be terminated for failure to keep his managers about a work situation, not just "poor performance." I would always, in termination issues, be quite specific about the reason someone was terminated.
Failure to do a good job on a work assignment may or may not be a misconduct issue. It has a lot to do with how you spin it. If you want to get rid of this person, you can inform him that you have made the decision to lower his salary, giving him very specific reasons why his salary was lowered. You cannot reduce him to less than full time hours or to the point where he is no longer eligible for benefits, as this will violate the hiring agreement, and he will likely qualify for unemployment benefits.
He will then have the personal choice to quit, and if he quits and files for unemployment benefits, he will have to prove that he had a good work related reason to quit. It is less likely that he will be approved if you have done your homework on your reasons for the salary reduction.