I think is actually a thing and it's despicable too. They 'eliminate' positions in one location then have your spot in another city for you 'if you want it', when moving can be financially crippling or undesirable. Then they can recreate the position whenever they damn well feel like it.
It depends. If there is an employment contract, then it would probably be a violation of that contract. But if there is no contract, then they can lay off employees for any reason not protected by law, or no reason at all.