I don't think that's horrible at all. Been there and it sucks when we always take the loss.
Ideally, if your relationship with this client is good enough, I would talk to them and explain what I wanted to do and why. This isn't a high income business by any means and being able to replace them in Jan would be better for you.
If need be, I too would give them notice for when it suits me. Not everything has to be done on when it suits the client and in this situation, it's a big hit you would take.
One word of warning...since you are thinking of letting them go January, I imagine you have to give a certain amount of notice. If you think speaking to this client might risk them pulling sooner, i.e. over the Christmas break, then you have to decide if speaking to them is worth the risk or if just giving notice on your own schedule is better.

































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