Mikel Arteta admits Arsenal are entering "a crucial moment" as speculation over his future continues following yet another defeat.

The Gunners were roundly beaten 4-1 in their Carabao Cup quarter-final clash with Manchester City at the Emirates Stadium on Tuesday night.

Having made eight changes for the match, Arteta saw his former club ease into the last four as Gabriel Jesus, Riyad Mahrez, Phil Foden and Aymeric Laporte all scored on their recalls to the City side.

Alexandre Lacazette had equalised against the run of play but other selections back-fired as Gabriel Martinelli hobbled off injured on his first start in over nine months and second-choice goalkeeper Alex Runarsson endured a night to forget.

A knee injury had kept Martinelli sidelined but – despite limping out of the game moments after the second-half began, following an earlier challenge from City goalkeeper Zack Steffen – the Brazilian is only expected to miss a few days.

Arsenal are now without a domestic win since a 1-0 victory at Manchester United on November 1 and sit 15th in the Premier League table heading into a Boxing Day London derby at home to Chelsea.

Games against Brighton, West Brom and Newcastle then follow and Arteta knows it is time for him and his players to address the alarming slide in results.

"Things have to turn around," he told Arsenal Media. "This is a crucial moment for us in the season and we have to do it this week.

"I'm really feeling for the players, and obviously for our fans because something is happening every game for different reasons. But we need results.

"Obviously the two goals that we conceded (against Manchester City) put the game into a really difficult situation.

"The first one was a really soft one really early in the game. That obviously gives us the worst possible scenario in the situation we are in, a real test.

"The team reacted really well and after that we kept trying, we scored a really good goal.

"We started to be on top of the game for 25 minutes after that, I think we were the better team. Then in the best moment of the game, we conceded another soft goal."

One of Arteta's boldest decisions in his year in charge has been to exclude one of their big-name players in Mesut Ozil.

The German has not played for the club since March and is currently not even registered in the Gunners' Premier League squad.

There have been calls for him to reinstate the 32-year-old when he gets the chance in January.

Ozil communicated his frustration in a Twitter Q and A session on Wednesday but maintained he was still backing the team.

He wrote: "It's a very difficult time for everyone around the club – not just for me. The situation is frustrating for everyone.

"Of course I would wish I could help the team especially right now, but as long as I don't get the chance I just hope that we get better results very soon again."

He added: "But let's stay positive."

City boss Pep Guardiola, who leapt to the defence of his former assistant Arteta after the game, is now a step closer to a fourth successive League Cup triumph.

"One step at a time, please," Guardiola replied when asked about retaining the trophy once again.

"I don't know where we will be in April. Now it is Newcastle and Everton, just two days difference.

"We have to see the draw. We are going to play to reach the final four years in a row."