Arteta’s Arsenal, who won last season’s FA Cup, were bundled out of the tournament, after three second-half Manchester City goals, with Gabriel Jesus having opened the scoring in the third minute.
The Gunners leveled on the half hour through Alexandre Lacazette but it wasn’t to be, with City racing to a semi-final spot with goals from Riyad Mahrez, Phil Foden and Aymeric Laporte.
It mounts the pressure on Arteta, who took over last December from Unai Emery and steadied the side to win the FA Cup and finish in the top 10 in the league, but they’ve since gone backwards.
Arsenal are winless in their past seven Premier League matches and currently sit 15th, only four points above the drop zone. The only shining light for the Gunners has been their perfect Europa League progress to this season.
“We have to turn it around, there is no question,” Arteta told Sky Sports.
“If we don’t, we are in big trouble, so this is the moment that is going to decide our season.
“I see how much the players try and what they are trying to do, but at the moment a lot of strange things are happening in every game and that makes things really difficult.”
Arsenal weren’t helped by an injury to Gabriel Martinelli who was forced off early in the second half.
“It was just a really bad kick on his shin and it was swelling up and he could not continue,” Arteta said.
Meanwhile, City boss Pep Guardiola urged caution on getting too excited as his side continues to get more positive results.
It is just one game,” he said. We started well, they changed their system and after we struggled a little. In the second half we were much better.”
Elsewhere, Championship club Brentford reached the last four with a 1-0 win over Newcastle on Tuesday night.