My take is he killed him because:
1). People saw him at the crime scene.
2). He was supposed to keep Gale safe and failed.
3). To show how easily he'd kill anyone, even if it's someone he likes or is a good worker.
I mean, the manner in how he did it was to send a message. He did it in front of Walt and Jessie and when dudes head turned to the side after he cut it, he grabbed his head, straightened it out and allowed the blood to spray on Jessie and Walt, as to say, "now you look at this! This could be you"
It was a boss move.