Coffee lovers in dense, urban areas like New York may soon have to walk more than just two blocks for their Starbucks fix.

The Seattle coffee giant announced plans to close 600 underperforming stores in the U.S. in a move that will eliminate 12,000 positions and cost it as much as $348 million in the next few quarters. Once the closures are complete, Starbucks expects the effort will boost its earnings by $100 million annually.

Starbucks, which is in the midst of a major restructuring to cope with increased competition and a more budget-conscious population, had already announced plans to close 100 of the 600 stores.

The company also said it plans to open 200 stores through September 2009, which is about half the number it had previously announced. In April, Starbucks said it would open less than 400 new stores each year between 2009 and 2011.

The retraction comes after a period of aggressive expansion for Starbucks. It doubled its number of outlets during a four-year period before it saw its customer growth plateau.
 
Starbucks' founder Howard Schultz returned to the helm of the company in January, and since then it has introduced a number of new initiatives, including a milder drip coffee.

Investors were clearly pleased with the news that the company planned to eliminate even more costs than it had previously planned. In after-hours trading, shares of Starbucks rose 7 percent.