Oh so his manager is NOT your boss...wow this changes everything! I think his manager is a real jerk for telling you that he is getting fired. For one thing that is not very professional and he should not even be discussing that kind of stuff with you.
If my friend was getting fired, I would tell him. Then I would also tell his boss that its not right to put me in the middle, I think he did that just to show you that he has the authority to fire someone. I actually think you should report him, he doesn't really need that kind of authority because he abuses it.
The only bad thing is you could lose a friend. BUT do you really want a friend like his boss? Is he hot after you or something? Maybe he was jealous and he didn't want the other person around? Why is he firing the other person...did he ever really say? I think that whole situation is a little messed up! BUT I know you will do the right thing...just do what you would want someone to do to you!!! Put yourself in the situation, would you want your friend to tell you IF you were the one getting fired?? If so, theres your answer!!

The manager was giving out information he shouldn't have it was wrong. He should be the one down the road. Unfortunately you could jeopardize your job by saying anything, I am with smiles who says he will be able to collect unemployment if fired. What a raw deal.