Microsoft is rebuilding security around AI and laying off hundreds, The Information reports

Microsoft is restructuring its security business to rely more heavily on artificial intelligence. That is according to The Information, as reported by PYMNTS and The Next Web. The details are therefore secondhand and have not been seen in the original.

According to the reports, Microsoft is expanding its AI-based security products, cutting back on traditional ones and consolidating engineering teams. That has led to several hundred layoffs. An exact figure has not been given. The security group had about 10,000 employees.

New chief, shifting leadership

Hayete Gallot took over leadership of the security business as executive vice president in February 2026. She came from Google Cloud, where she was president of customer experience. Before Google, she spent nearly 16 years at Microsoft. She reports directly to Satya Nadella.

Her predecessor, Charlie Bell, moved to a role responsible for engineering quality and systems. Kelly Bissell, who was corporate VP for fraud and abuse, left Microsoft after four years. According to The Next Web, Gallot has replaced at least eight top executives from the previous leadership.

Focus on AI tools

According to the reports, the focus includes Security Copilot, tools that scan code for vulnerabilities, and tools for monitoring companies' AI agents. AI agents are programs that can carry out tasks on their own.

In an internal memo to employees, Gallot writes, according to PYMNTS, that the entire industry is being rethought from the ground up. It rewards the companies that see the shift early, make tough choices and execute with discipline.

Battle against the AI labs

According to The Next Web, Microsoft wants to win back security spending that has gone to Anthropic and OpenAI. The company plans to do so by presenting itself as a cheaper and more secure alternative. According to the reports, sales staff are to be trained to compete directly against the AI labs.

The background, according to The Next Web, is that companies are worried about AI-driven attacks and that AI can find software flaws faster than humans can.

The pressure on Microsoft's security is not new. After a critical report from the Cyber Safety Review Board in 2024 on the company's security culture, Microsoft assigned 34,000 engineers to security initiatives.