Microsoft is to create 200 highly skilled engineering positions in Dublin.

The recruitment drive follows an investment of €27m in a new 10,000sq.m engineering hub close to its main campus in Leopardstown.

The expansion will bring to 2,700 the total number of staff employed by the tech firm at its offices and data centre operations in Ireland.

Microsoft has already begun recruiting for the new positions, which span areas such as software and customer engineering, programme management, product design, user experience and data science.

They will work on developing, deploying and supporting cloud services and new technology for customers around the globe.

The company already employs 600 engineers in Ireland.

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Microsoft Ireland's managing director, Cathriona Hallahan, told RTÉ News that while the Covid-19 pandemic had driven significant growth in the business and a technological leap among customers, it is not the only reason for the investment.

"None of these investments where you are putting millions of dollars into a redesign comes specifically from one particular thing," she said.

"It is around all of our customers large and small who are digitally transforming their businesses."

"And that's happening on a global scale. Obviously Covid has helped accelerate that because technology is at the centre of how we are communicating now and how we are connecting and how businesses are operating.

"So it is a factor, but it is not the only factor."

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Currently nearly all Microsoft employees continue to work from home due to Covid-19 restrictions and Ms Hallahan said that had brought challenges for employees.

Microsoft Ireland Managing Director Cathriona Hallahan

Ms Hallahan said the firm will continue to abide by the Government rules until they are lifted, but it will be asking staff to return to the office after that.

"As soon as it is safe to have them back we will bring them back," she said.

Central to the new engineering hub building is an area called The Garage - a space where Microsoft employees, as well as external partners such as customers, academics and students, will be encouraged to come to innovate, experiment and create, as well as fail.

As well as a large collaboration space, it also includes a maker space with cutting edge equipment like 3D printers, laser cutters and a milling machine.

Although it is a physical space, The Garage will have digital programmes running while Covid-19 restrictions remain in place.

Microsoft has ten other Garages in the US, Canada, Israel, India and China, but this is the first to be developed in Europe.

The investment has been supported by the Government through IDA Ireland and has been welcomed by  Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar.

Martin Shanahan, IDA chief executive, said this is exactly the type of foreign direct investment that his organisation is trying to bring to Ireland.

"This has come at a really important time, also it shows that Ireland continues to be competitive, even in the middle of a global pandemic," he said.