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A giant coffee seller such as Starbucks will close 600 stores and cuts 12,000 full and part-time position. Starbucks said this due to teh economic downturn and increasing competition. The coffee seller, bracing for its first full-year profit decline since 2000, has been grappling with the slowing U.S. economy and consumer spending at the same time that major competitors like McDonald's Corp have begun attacking its core business.

Those critics complained that the company had overbuilt in the United States particularly in major urban areas like Manhattan, where it is not unusual to see several Starbucks in a single city block.

The Seattle-based company was also an aggressive builder in California and Florida. Those states experienced red-hot growth during the housing boom and have been hardest hit by the U.S. housing downturn.

Oppenheimer & Co analyst Matt DiFrisco said he was "very encouraged" by the company's announcement.

"It helps remove some of the cannibalization that the company brought on itself," said DiFrisco, who also has an "outperform" rating on Starbucks shares. The number of unemployed in us today will increase, and the stock price of Starbucks increased but analytics say that this action will further worsen the U.S. economy and steep increases in gas and food prices would put additional pressure on the company known for its premium-priced coffee drinks, such as $3 to $4 lattes.