JesasaurusRex
On a break
My place did both 

We don't ask salary history but we do ask salary expectations.
just to make sure we are on the same page before either side invests time in the hiring process.
Of course it's cost cutting, you think they'd say "because we felt like it"? Performance would just be termination. It's that easy, and depending on the industry not super uncommon. Most employers know the employee will quit though or something more dramatic so i don't think it happens too frequent. It does however happen, from personal experience anyways.
Better to just lay somebody off imo. The resentment is huge