Microsoft Rebuilds Security Around AI, Cuts Hundreds

Microsoft is reshaping its security business around AI — and the shift has already led to several hundred job cuts, according to The Information. The company, the world’s biggest seller of cybersecurity software, is consolidating engineering teams, dialing back traditional products, and putting more weight behind AI-driven security tools.

The bet is both defensive and financial. Companies are increasingly worried about AI-powered attacks, while more of their security budgets are flowing to Anthropic and OpenAI. Microsoft wants to win that spending back.

The changes are being led by Hayete Gallot, who took over Microsoft’s security business in February and reports to Satya Nadella. Gallot spent 15 years at Microsoft before running customer experience at Google Cloud. According to PYMNTS, her message to staff in an internal memo was direct:

“The entire industry is getting reimagined from the ground up. A few months ago, we made those choices. Now we must execute.”

The overhaul has also included the departure of several senior executives.

Microsoft’s product focus is shifting toward tools designed to counter AI threats with AI. Gallot is pushing Security Copilot, software that scans code for vulnerabilities, and products meant to help companies monitor their own AI agents for security issues. That matters as more businesses hand work to autonomous agents, creating new openings for attackers.

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The strategy is already showing up in Microsoft’s lineup. The company said it has folded its threat-intelligence tools into a single Defender portal and launched new expert-led Defender services.

At the same time, Microsoft is intentionally pulling back from older offerings. The company is positioning itself as a cheaper, more secure, all-in-one option than the major AI labs, and has reportedly coached sales staff to make that case. The pitch comes as AI is finding software flaws faster than humans can — something OpenAI has highlighted with its in-house AI hacker — while Nadella continues to argue that AI is remaking the business from the ground up.