Speculation of widespread closures was sparked when every Australian store was ordered to close at 2pm so all staff could attend 28 meetings around the country but they were not given prior indication of the move. Starbucks announced in a statement embargoed until 5pm today that the decision to close 61 "underperforming" locations was made "to concentrate its attention and resources on profitable growth, operational efficiencies and an enhanced experience for customers and partners [employees] globally".

Starbucks calls its employees "partners". Starbucks Asia Pacific president John Culver would not reveal which stores would close, saying he wanted employees to be told first. "Obviously a decision like this is a very difficult decision for any company to make and really more so from a Starbucks perspective because of the impact that we have on our people," he said.

"We wanted to make sure we handled these announcements the right way and put our people first." The locations of the closures will be made public on July 31 when they will be posted on the chain's Australian website.

Mr Culver said the company had set up an "employee assistance line" offering counselling to its "partners" and redundancy packages would be offered. Casual staff would also be offered redundancy. He refused to say why the employees were give such short notice of the massive closures.

"As part of the decision all partners, whether they have worked for the company for week or multiple years, will be eligible for a redundancy package," Mr Culver said. "Depending on length of service and position, it ranges anywhere from a maximum of 20 weeks of redundancy pay that we will be paying. All partners at a minimum will receive at least a week's notice-period pay as well as two weeks' severance pay.

"This is above and beyond what we are legally required to do but we feel it's the right decision to support our partners and show the value we place on them as people." Mr Culver said about 685 employees would lose their jobs but he would not reveal what proportion of them were full time and casual.