The club said in a statement: "Everton Football Club wishes to announce that its team manager Mr Walter Smith OBE has today left the club, his contract having been terminated.
"The club wishes to thank Mr Smith for his service since his appointment in the summer of 1998. The club has now begun the process of identifying and then appointing a new manager, something which, it is hoped, will be concluded as swiftly as possible.
"No further comment will be made until the club is in a position to name its new team manager."
It is thought that David Moyes will be named as the new manager at an 11am press conferance.
The problem is that niether of these would be happy with a short term contract, and the club may be reluctant to take a risk with unproven managers. Of course, they could just put Colin Harvey in charge until the end of the season and then try and get Dave Jones from Wolves.
So, what cost Smith his job. Well, its not the FA cup defeat, its the fact that we have won only once in thirteen games, and the fact that we continue to play defensive football even though we have no problem defending, but a big one scoring !
I will be doing some digging into David Moyes, who is the favorite to be out next manager, i'll let you know what i think !