Microsoft Corp. (MSFT), the world's largest software maker, said on Friday it will hire as many as 7,000 employees worldwide in its current business year as it continues to expand and to fill vacant positions.

Microsoft also said it would increase spending on research and development, excluding equity compensation costs, by 4 percent to $4.8 billion in its fiscal year to June 2005, from $4.6 in fiscal 2004.

Including the cost of paying employees in stock, Microsoft spent $6.8 billion on R&D last year, but said that number would be slightly lower at around $6 billion in fiscal 2005 due to the lower costs of issuing stock awards.

The hiring and research spending figures are usually announced at Microsoft's annual financial analysts meeting, scheduled to be held on Thursday, July 29, but the company disclosed those figures early this year.

Microsoft said that it will continue to grow, even as it announced earlier this week that it would return more than $75 billion to shareholders over the next four years by boosting dividends and buying back shares.

That has sparked concerns that Microsoft's days as a high-tech growth stock and aggressive recruiter may be over, but analysts said that strong underlying growth means that Microsoft will continue to add to its 57,000-strong work force.

"In an uncertain tech environment, they are still a pretty safe bet," said Brendan Barnicle, analyst at Pacific Crest Securities.

Microsoft added about 2,160 people, on a net basis, to its total work force last year, hiring more than 7,000 new employees to fill new and vacant positions.

Of the total new hires, Microsoft said it expects to add 3,000 employees at its Redmond, Wash., headquarters and in the Puget Sound region, but the total net gain in new employees could be lower, depending on how many vacant positions need to be filled.

Microsoft has about 28,000 employees in the area and 57,000 worldwide.

"We remain very committed to the region," said Microsoft spokeswoman Tami Begasse.

Microsoft is building facilities in India and has been hiring there as it seeks to lower technical support and development costs.

Outsourcing to India has become a hot topic this year as many high-tech companies turn to the country's growing pool of English-speaking software engineers as a cheaper source of labor. It has also become a U.S. political issue in an election year.

"Microsoft has a long-term commitment to India," Begasse said, "We're exploring and evaluating new opportunities there."