Insolvent telecom equipment maker Nortel Networks posted a bigger quarterly loss on Monday as reorganization costs and plunging sales dented the company's results.

Nortel lost $274 million, or 55 cents a share, in the second quarter. That was worse than the loss of $113 million, or 23 cents a share, a year earlier.

Revenue fell 25 percent to $1.97 billion, primarily a result of the continuing economic downturn and the uncertainty created by the creditor protection proceedings, the company said.

Nortel filed for bankruptcy protection in January, blaming the recession for crippling its recovery efforts. Also on Monday, the company said CEO Mike Zafirovski would step down and that its board would shrink to three from nine directors.

Nortel -- once North America's biggest maker of telephone gear -- said the quarter's loss included reorganization costs of $130 million.

Rather than restructure itself into a smaller, leaner company, Nortel has decided to sell its key assets to the highest bidder in hopes of generating value for its creditors.

(Reporting by Wojtek Dabrowski; editing by Frank McGurty)