There's a way to play it in a less antagonistic fashion.

If you really want to stay, you can still look for another offer with the conditions you want, and use it to point out that the company is being unreasonable in its demands and that market conditions for labour have shifted, and actually they are putting themselves in a bad position trying to enforce their preferences against prevailing conditions.

(IMO most people shouldn't go more than a few years without checking the job market and getting an offer, even without intent to switch jobs.)