The coffee chain Starbucks is closing 600 stores in the United States with the loss of 12,000 jobs. It's the latest evidence of the squeeze being exerted on US economy. From New York our North America business correspondent Greg Wood reports:

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The chain has expanded aggressively in states such as Florida and California, which have been badly hit by the US housing downturn. It also faces growing competition from a variety of new outlets. And a Starbucks coffee doesn't have quite the cachet that it used to when it was an exciting young brand.

The company says it hopes to find new jobs at nearby stores for many of the 12,000 employees affected. But the news will add to concerns about mounting unemployment in the United States. Figures out later this week are expected to show that the number of people in work has declined for the sixth month in a row.

Greg Wood, BBC News, New York

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cutting back on
reducing

the cup of coffee on the way to the office is a casualty
people try to save money and so no longer stop for coffee on their way to work; the demand for coffee sold in coffee shops in the morning is becoming smaller

it's earmarked
it is intending to close

has expanded aggressively
has rapidly and significantly increased the number of its shops in order to make more profit

badly hit
seriously affected in a negative way

housing downturn
a combination of falling house prices and the unwillingness of the banks to offer new mortgages, meaning fewer houses are being bought and sold

new outlets
shops belonging to other, newer companies or chains

doesn't have quite the cachet that it used to
no longer has its previous appeal

add to concerns
be another reason for worries

mounting unemployment
rapidly rising number of people out of work

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