Global Exchange Services Inc., a Gaithersburg-based company that sells business software, said yesterday it would lay off about 300 people, about 20 percent of its staff, to cut costs.

The job cuts will include 100 of about 480 workers in the Washington area. By the end of the year, the company will employ about 1,250 people.

"It's entirely part of a transformation process," Robert B. Patrick, chief marketing officer, said of the layoffs. The company is trying to modernize its operations and free up cash to invest in new products, he said. "We're investing in new technology, we're consolidating customer service operations, product development operations."

Global Exchange was spun off from General Electric Co. in 2002. The privately held firm lost $303 million last year, largely because of a write-down related to its spinoff, on sales of $363.5 million.

Its revenue has been on the decline because more companies use the Internet to trade goods and services with each other, instead of buying proprietary software. Global Exchange currently has 30,000 business customers.

The company is trying to develop cheaper ways to exchange information with customers, including developing online programs, Patrick said.

The layoffs come after Global Exchange bought HAHT Commerce Inc., a Raleigh, N.C.-based software firm, for $30 million in January. The money saved from the layoffs will be spent on new products related to HAHT's software, which helps retailers and their vendors exchange information about such things as prices, inventory and delivery, Patrick said.

Top competitors include International Business Machines Corp. and Sterling Commerce, a unit of SBC Communications Inc.