CHICAGO (Reuters) - Grains merchant Archer-Daniels-Midland ( ADM ) reported a drop in fourth-quarter profit on Tuesday, pressured by weak oilseed crush margins and uncertainty over U.S. biofuel policy, and said it would be laying off up to 700 employees globally this year.

Chicago-based ADM said it aimed to cut costs by $500 million to $750 million over the next three to five years via job cuts and lower raw materials and manufacturing costs.

Shares of the company were down 1.6% in premarket trading.

Reuters had reported last week that the grain trader would soon start laying off employees in a global effort to cut costs, as low crop prices weighed on the company's profit.

ADM has seen profits erode under slow demand and a global glut of staple crops like corn and soybeans, which it buys, sells, processes and ships around the world. Prices of both crops hit four-year lows in 2024 as global stocks of the food staples ballooned to multi-year highs.

The company has warned that a challenging commodities cycle would continue this year and said it was focused on controlling costs to weather the downturn.

ADM forecast adjusted earnings to be in the range of $4 to $4.75 per share in 2025. Analysts on average were expecting $4.67 per share.

Operating profit in ADM's agricultural services and oilseeds division, its largest segment, tumbled 32% from the same quarter a year earlier on weak North American oilseed crushing margins and uncertainty around biofuel policies.

The carbohydrate solutions segment's operating profit rose 3% and the nutrition unit swung to a profit.

The company posted an adjusted profit of $1.14 per share for the three months ended Dec. 31, down 16% from $1.36 a year earlier and compared with analysts' average estimate of $1.15 per share, according to data compiled by LSEG.

(Reporting by Karl Plume in Chicago and Vallari Srivastava in Bengaluru; Editing by Shreya Biswas and Emelia Sithole-Matarise)