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Originally published August 15, 2007 at 12:00 AM | Page modified August 15, 2007 at 8:12 AM

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Microsoft hiring slows but still grows in state

While Microsoft's overall rate of employment growth cooled some in the past year, the pace of growth in its home state was even slower ...

Seattle Times technology reporter

While Microsoft's overall rate of employment growth cooled some in the past year, the pace of growth in its home state was even slower — but still easily outpaced job creation in the rest of the local software industry and the broader economy.

Microsoft counted 35,711 full-time, permanent employees in Washington state at the end of July, up 7.1 percent from the level reported on the company's Web site a year earlier.

Total worldwide employment at Microsoft in the same period rose 10.6 percent to 79,136, and the portion of that total that was outside the United States increased 14.5 percent.

In recent years, local and worldwide growth rates at the company have been more in line. For example, from September 2005 to July 2006, the company's Washington work force grew by 10.2 percent, compared with a global growth rate of 12.6 percent.

Perhaps that should come as no surprise for a company whose sales in emerging overseas markets are increasing faster than its U.S. sales.

Still, the local hiring trends at major Washington employers like Microsoft and Boeing are watched closely by area real-estate developers, service providers, economists, recruiters and competitors, who plan accordingly.

The well-paid workers in software and aerospace help set the tone for the rest of the economy.

"Those jobs are going to create other jobs, support jobs," said Cristina Gonzalez, a labor economist at the Washington Employment Security Department who follows the Seattle area. "It is important that we continue to grow these high-paying jobs."

But, she added, the rest of the local labor economy is doing well. Year-over-year job growth in July was 3.8 percent. The software-publishing sector, which includes Microsoft, had a 5.1 percent growth rate.

Microsoft's 7.1 percent local growth rate "might be considered a slowdown for them, but that's still pretty darn quick growth," Gonzalez said.

Microsoft does not provide local employment updates on a regular schedule, and the figures in this story do not include the legions of outside contractors or vendors, which the company does not quantify publicly.

"There's a lot of other ways that they contribute to employment in the local economy that doesn't show up as direct Microsoft hires," said Matt Rosoff, an analyst with Kirkland-based Directions on Microsoft.

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The company's latest official employment figures also don't cover the impact of its acquisition of Seattle-based digital advertising company aQuantive, which was completed Monday. All 2,600 aQuantive employees, 650 of whom work in Seattle, joined Microsoft, which would push the company's global work force past 81,700.

It makes sense for Microsoft to be growing its work force faster overseas, Rosoff said, pointing to recent comments from Kevin Turner, the company's chief operating officer.

Turner told analysts last month that 57 percent of Microsoft sales — excluding the admittedly huge slice of business Microsoft does with PC manufacturers — now come from outside the U.S.

Turner, whose responsibilities include Microsoft's global sales force, suggested the company would hire more workers as it aims to take advantage of growth opportunities in emerging economies, such as the so-called BRIC countries, Brazil, Russia, India and China.

"We're focused on ensuring that we have a great team in place before we focus on building a huge business," he said.

Rosoff also noted that the company continues to grow its overseas research and development work force, most recently with offices in Richmond, outside Vancouver, B.C., that could employ up to 400 people.

Benjamin J. Romano: 206-464-2149 or bromano@seattletimes.com

Copyright © 2007 The Seattle Times Company

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