CHICAGO, Dec 3 (Reuters) - Global commodities trader

Cargill began laying off employees across its vast operations on

Tuesday in a drive to slash headcount by 5%, sending U.S.

workers from supply chain, inventory control and other roles to

look for new jobs.

Cargill, a major grain merchant and U.S. beef processor, is

facing a downturn in returns in cattle, grains and oilseeds

businesses.

In Minnesota, home to its headquarters, Cargill plans to

terminate 475 employees at an office center in Wayzata starting

on Feb. 5, the company said in a letter to state officials.

Cargill began informing staff about layoffs this week, and they

are eligible for severance, according to the letter.

Cargill has more than 160,000 employees worldwide, and a

spokesperson said all operating regions will be affected by

cutbacks.

"The company is facing a cyclical downturn," said Chris

Johnson, agribusiness director for S&P Global Ratings.

"Certainly, their exposure to beef is a reason why they have

faced a significant shortfall in earnings."

Cargill rival Archer-Daniels-Midland ( ADM ), which does not

have a beef business, said on Tuesday it is seeking to control

costs as the challenging commodities cycle is likely to continue

into 2025.

The cost of cattle has soared for beef processors after

drought reduced grazing lands, prompting ranchers to slash the

nation's herd to its smallest size in decades. U.S. meatpacker

Tyson Foods ( TSN ) said on Monday it is closing a Kansas beef

and pork plant.

Cargill's oilseed processing business is also under pressure

from uncertain demand for biofuels and lower processing margins,

analysts said.

Ample supplies of soybeans and corn have pushed prices for

the commodity crops near four-year lows, hitting the grains

handling business of Cargill, ADM and other rivals such as

Bunge.

On LinkedIn, several employees in Costa Rica said they had

lost their jobs in talent acquisition. U.S. employees in

inventory control, marketing, supply chain analysis, and the

company's Digital Technology and Data unit also sought new jobs

on the networking site.

Cargill previously said it will undergo structural changes

after missing internal earnings goals. It reported revenue of

$160 billion for its 2024 fiscal year that ended in May, down

from a record $177 billion in the previous year.

"We think it's more of a multi-year process for this

strategic change to really impact the company's profitability,"

Johnson said.