Russia slipped to a 1-0 loss in their Euro 2016 qualifier in Vienna, Rubin Okotie's 73rd-minute strike proving the difference between the two sides.
Fabio Capello's men have now taken just five points from their opening four Group G games, with their only competitive win in 2014 coming in a 4-0 victory over minnows Liechtenstein in September, although they remain very much in contention to qualify for the Euro 2016 finals in France.
And Mutko has delivered a damning assessment of Russian football, which he believes has regressed in recent times.
"No one could have been happy with the result against Austria or the way our team played," Mutko told Sport Express.
"The level of football we are playing has seen us drop into the 'middle' tier of European nations and perhaps we are even falling below this. We have fallen below 30 in the FIFA world rankings. Maybe by the end of the year, we will be below 40.
"Now we need to deeply analyse and weigh up the complexity of the situation. I think this will happen within the next few days and we will announce the decisions we have come to. I am positive that these should be drastic in their character.
"Today we have been cast back to 2005, when we had to start everything again practically from zero.
"This is happening on the background of a number of worrying tendencies within the development of Russian football. The youth teams are weak and are putting in poor performances. It's completely obvious that we have been going backwards recently. We are regressing."
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