Reply to expect to be laid off: better to quit or not?

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[quote=Anonymous]I have been told unofficially that my job is being phased out and I should look for other work.  Situation is that I am a specialist in skill A, and the org's work has shifted to more of B and C, and so they want to hire a generalist in A, B, C rather than pay for a specialist in A.  I am job hunting.  The employer plans to post a new position seeking different skills and replace me with that new hire.   I think they'd also rather hire someone less senior and save some money.

If I am fired, or laid off (which is this situation?  I'm not even sure), how do I talk about that in job interviews?  I realize I have to be truthful, but don't need to say a lot.

Would I be better off to quit first, so I don't have to say I was fired?  Financially that is worse for me, would prefer to get unemployment, but I'm not sure just how horrible it is to be let go, and if I should beat them to the punch, so to speak.  Hoping the job hunt pays off before it comes to this.  My work is something that can be done as a consultant, so option to quit and hang up a shingle while seeking a full-time job, but that offers less financial stability, may take a bit to generate clients.  
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