The president asked Kenyans to unite, and said: "We will not flinch in war against terrorists."
Kenya's police chief David Kimaiyo stood down, while Interior Minister Joseph Ole Lenku was dismissed.
Earlier, al-Shabab killed 36 quarry workers in the north-eastern Mandera region near the Somali border.
The group attacked the workers around midnight on Monday while they were asleep in tents at the quarry in Kormey, 15km (9 miles) from the town of Mandera.
Non-Muslim workers were shot dead after being separated from the Muslims.
He said Interior Minister Joseph Ole Lenku had been fired, and he nominated an opposition politician and former army general, Joseph Nkaissery, as his replacement.
The president also announced that he had accepted Mr Kimaiyo's wish to retire.
Correspondents say both Mr Kimaiyo and Mr Lenku have been under pressure to resign amid growing concern over security in Kenya following a spate of attacks.
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