Would you people stop relating everything to "these economic times"? Yes, it has been better but it could also be worse. If someone thinks they deserve a raise, he/she should ask for it. A good company values good work even (or especially) in rough times. That way you keep people motivated to work hard.
Firing someone because he asked for a raise is simply stupid. If you want to/have to fire 35 people, you fire those where it is beneficial to let them go. If you don't want to give someone a raise, you just say no.
By the way, if a company is letting people go, it's always to have more money (well, duh) - in most cases not necessarily because you can't afford the employees anymore but because you have found a way to make it more cost-efficient.
It makes more sense to let the people only work half time than to fire them. This way you don't have to spend money afterwards to train new employees.