Starbucks closing stores, laying off workers

The company's rapid expansion crashed head-on with a struggling economy.

Seventy percent of the stores that will close have opened within the past year and a half. Starbucks say they were either taking too much business from pre-existing locations, or simply not profitable.

The closures don't come as a surprise to economic analysts. They say the company's willingness to place stores so close to others clashed with these economic times. People feeling the pinch in their pocketbooks means they are less likely to pay big bucks for something they can make at home for a lot less.

Some 12 thousand employees will be affected by the closures. The company says it will try to relocate them to stores that will remain open.

Starbucks will pay about eight million dollars in severance.

The company hasn't said which stores will close. A website that engages in Starbucks gossip says expect to hear more on that by the beginning of August.

WEB LINK: Starbucks Gossip