Six months after guiding Chelsea to an unlikely Champions League title, Roberto Di Matteo was fired Wednesday with the team on the brink of becoming the first defending champion eliminated from the group stage.
Di Matteo, who was hired on a permanent basis in June, was dismissed a day after a 3-0 loss to Juventus in Turin left Chelsea's title defense in tatters.
Chelsea also is struggling in the Premier League, having picked up just two points from its last four games to fall to third place.
"The team's recent performances and results have not been good enough and the owner and the board felt that a change was necessary now to keep the club moving in the right direction as we head into a vitally important part of the season," Chelsea said in a statement.
There was no immediate announcement on a replacement for Di Matteo, but former Liverpool and Inter Milan coach Rafa Benitez has been heavily linked with the job. Pep Guardiola, currently on a break from coaching after leaving Barcelona at the end of last season, will also be a contender.
"The club will be making an announcement shortly regarding a new first team manager," the statement said.
Chelsea was in disarray when Di Matteo, then an assistant coach, took over from the fired Andre Villas-Boas in March, initially on a temporary basis. The Italian brought together squabbling factions within the squad and led the team first to the FA Cup title and then the Champions League, beating Barcelona in the semifinals and then Bayern Munich in the final.
Di Matteo, with his typical coolness, was also praised for the way he handled a racism case involving John Terry that engulfed the club. Chelsea is in the middle of another racism incident, having accused a Premier League referee of abusing one of its players.
However, Chelsea owner Roman Abramovich has showed his ruthless edge following the team's first disappointing run of results this season. Di Matteo's successor would be the ninth manager under the Russian billionaire since he bought the club in 2003.
Chelsea is in third place in Group E behind Shakhtar Donetsk and Juventus with one match left. The Blues next face Danish club FC Nordsjaelland, but they could still be eliminated even if they win depending on the result of the other game.
In the Premier League, Chelsea had been leading for much of the season but now trails Manchester City and Manchester United.
"The club faces a difficult task ahead in qualifying for the knockout stages of the UEFA Champions League as well as maintaining a strong challenge for the top of the Premier League while competing in three other cup competitions. Our aim is to remain as competitive as possible and challenge strongly on all fronts," Chelsea said.
Chelsea's next game will be a home Premier League match against Manchester City on Sunday.
The 42-year-old Di Matteo is a Swiss-born Italian who played for Italy's national team and also served as a midfielder for Chelsea. After his retirement, he went into coaching and led both the MK Dons and West Bromwich Albion before joining Chelsea's backroom staff.
"We will never forget the huge contribution he has made to this club's history," Chelsea's statement said.
Benitez has been out of work since being fired by Inter in December 2010. Although experienced, the appointment of Benitez would raise eyebrows given his trademark defensive approach. Abramovich is widely known to prefer his team to show a more attacking style, demonstrating this by spending heavily on attacking midfielders Oscar, Eden Hazard and Victor Moses in the close season.
AP Sports Writer Steve Douglas contributed to this report.