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It seems America’s taste for over-priced coffee is waning as the aveage American consumer is concerned with the dwindling economy, skyrocketing fuel prices and the volatility of the stock market and real estate markets. Amidst this credit crunch, more American’s are preferring to cut back on frivilous expenses such as a cup of java giant Starbucks designer $4 lattes.

Starbucks Corp. (NASDAQ: SBUX) announced their plans today to close nearly 600 underperforming stores and lay off as many as 12,000 full and part time employees. The company cites competition from places like McDonald’s and less business as a result of the economy for the drastic cutbacks. The numbers don’t lie, Starbucks is closing 19 percent of all US company operated locations that opened over the last two years. A company representative stated most employees will be moved to nearby stores, but she did not know exactly how many jobs will be lost. Starbucks estimated nearly $8 million in severance costs.

At the end of March, there were 16,226 Starbucks stores around the world. The company operates 7,257 of those stores in the US and 1,867 abroad. The remaining 7,102 locations are run by franchise partners who license the Starbucks brand.

In the meantime, Starbucks Corp. is seeing a surge in after hours trading volume. Shares closed today down 0.76% at $15.62 in normal trading but the after hours market is seeing shares remarkably trade higher by 3% at $16.14.