Asked to replace older employee with younger one - WWTOTD?

Let's say you're a 41 y/o manager at a company and the higher ups tell you that you're getting a new employee. Sounds great but its a little suspicious because you aren't in need of help.

Interviews start last Tuesday. First guy in is a great candidate. He is a high performer for a competitor. I'm thinking management will like this because we all know who he is and he has a great reputation. They tell you to hire somebody under 35 instead. Red flags going up, but okay maybe it's just the culture they want. We are zero'd in on a 28 y/o unemployed guy who is has technical skills but lacks experience so he's an unknown quantity.

Fast forward to this morning and now we have to lay off a long time employee who was instrumental to the firm's growth and success. Really sharp guy. He is 52 years old. They want him gone before new guy gets here.

Yes, the new guy is willing to work for less than half the cost, but is this not an indicator of bad things to come?