You will need to deactivate the employee's account so he cannot log in anymore, but we advise against deleting the account altogether. There are three main reasons not to delete: Disabled users don't count towards your licenses anyway, so you can have as many as you like.
You can still view all their data any time. And if you ever decide to rehire them, you can re-enable them with one click and they can pick up where they left off. See the admin manual to see how disabling an account works.
Learn how to view historical information from deactivated employees, here.