Many years ago - many jobs ago, we got a new CEO, and she wanted to make a big splash, so she started firing people. And this is a public, non-profit job, so most people were working in less than stellar conditions simply because they were passionate about public service.
I was two days away from putting in my 2 weeks' notice because I had landed another job, but they fired me and gave me two months' severage. So instead of having to work another 2 weeks, I didn't have to go another day. I said "Sorry it didn't work out." and held my smile till I got out the door.
Yes, but you should always be applying and interviewing. Getting a new job generally gives you a 20% raise, while staying at the same job gives you like 5% if you're lucky and you take on new responsibilities.