Microsoft cuts hundreds of security jobs and shifts toward AI-powered tools as new chief Hayete Gallot overhauls the unit to compete with OpenAI and Anthropic.
Microsoft is overhauling its cybersecurity business, cutting several hundred jobs and shifting engineering resources toward AI-powered security products, The Information reported Wednesday, citing unnamed sources. The changes are meant to capture spending that is flowing to AI firms Anthropic and OpenAI, the report said. Microsoft declined to comment.
The restructuring is being led by Hayete Gallot, who took over the security unit in February. Gallot is prioritizing tools like Microsoft Security Copilot, products that scan code for vulnerabilities, and software that helps companies monitor their own AI agents. The shift comes as corporate clients demand defenses against AI-powered hacks, according to the report.
"The entire industry is getting reimagined from the ground up," Gallot wrote in an internal memo, per the report. "And it will reward the companies that see the shift early, make the hard choices, and execute with discipline."
Microsoft Chairman and CEO Satya Nadella wrote in a Feb. 4 blog post that Gallot rejoined the company as executive vice president, security, reporting directly to him. Gallot spent 15 years at Microsoft before moving to Google, where she served as president of customer experience for Google Cloud.
"She brings an ethos that combines product building with value realization for customers, which is critical right now," Nadella said in the post. "As we shared during our quarterly earnings last week, we have great momentum in security, including progress with Security Copilot agents, strong Purview adoption, and continued customer growth."
The overhaul is the latest sign of Microsoft's intensifying competitive strategy against OpenAI and Anthropic. The company is positioning its services as a more secure and cost-effective end-to-end alternative for corporate clients, the report said.
Microsoft's MSFT stock page Alpha Score sits at 58/100, labeled Moderate, with the stock trading at $395.63, up 2.78% on the day.
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