When to terminate?

We have an employee that _just_ meets requirements. His attendance is marginal. He does only what is asked, but nothing more. When he is not on a call, he sits in his office with the light off either d/l music or playing games. When he does work on a PC, it is usually sloppily done, and sometimes incomplete.
About two months ago he rebuilt a PC, and did not include a vital e-mail account in addition to the primary users e-mail, and we have lost at least two students due to this. It was not entirely his fault because the user did not mention it, but I feel that not getting even one student is a very serious matter. I think it is time to let him go, any thoughts on the matter? Thank You!