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Mobile phone maker Sony Ericsson announced Friday it was cutting 2,000 jobs worldwide after reporting a 97 percent drop in second quarter earnings due to difficult market conditions and the global economic slowdown.

Company spokeswoman Lisa Canning in London said the company would cut 2,000 jobs “within the next 12 months” as part of an effort to reduce operational costs by 300 million euros ($470 million) per year.

Sony Ericsson posted an operating loss of two million euros ($3.1 million) in the second quarter, compared to a profit of 315 million euros in the same period of last year.

Net profit plunged by 97 percent to six million euros from 220 million a year earlier, while sales fell by 9.4 percent to 2.82 billion euros.

For the past year, Sony Ericsson has been trying to develop its business on fast-growing emerging markets in order to reduce dependence on its traditional, near-saturation European outlets.

As a result it has sold more low-end phones, where prices are lower and the competition is tougher than in the high-end segment, the company said.

Sony Ericsson’s results were in stark contrast to the better-than-expected earnings report by market leader Nokia on Thursday. Nokia said it expected the global market for cell phones to grow by 10 percent or more in 2008, upgrading an earlier estimate.

At the end of June, Sony Ericsson had eight percent of the mobile phone market, compared to Nokia’s 40 percent.

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Motorola sued a former executive for allegedly violating a non-compete agreement by taking a job as head of global iPhone sales for Apple and helping Apple hire two other former Motorola employees.

The suit was filed Thursday in an Illinois circuit court in Cook County against Mike Fenger, who quit Motorola in March as senior vice president of mobile devices for Europe, Middle East and Africa to join Apple.

The suit alleges that Fenger accepted “millions of dollars in cash, restricted stock units, and stock options” in exchange for agreeing not to join a competitor for two years after leaving Motorola. “In his new position he cannot perform his duties for Apple without inevitably disclosing Motorola’s trade secrets,” the lawsuit states.

Fenger, who now serves as vice president of global iPhone sales, also hired away two high-level Motorola employees who have access to Motorola’s trade secrets and customer relationships. The suit didn’t name the two employees he allegedly helped Apple recruit.

Motorola asked the Cook County court to stop Fenger from working for Apple for two years and to bar him from soliciting or hiring Motorola employees or disclosing Motorola’s confidential information. It also demanded damages and repayment of stock options given to him in exchange for signing the non-compete agreement.

Among the high-ranking executives who moved to rivals are former Chief Technical Officer Padmasree Warrior, who in December joined Cisco, Motorola’s main rival in the cable set-top box business. Motorola also sued an ex-manager who went to work with former mobile device chief Ron Garriques at Dell.

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AFP - Indian mobile phone group Reliance Communications and Africa’s largest cellular firm MTN have called off talks for a tie-up because of “legal and regulatory issues”, the companies said.