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Livorno sit 19th in the Italian top flight following four straight league defeats, the latest coming in the form of a 3-0 home loss to Parma on Saturday.
The Tuscany outfit have won just three league games all season under Nicola, losing 12 of their 19 Serie A encounters so far.
And, after president Aldo Spinelli admitted that he was considering Nicola's position, the club have now parted company with the 40-year-old, who guided Livorno to promotion from Serie B last term in his first season in charge.
A statement on Livorno's official website read: "AS Livorno Calcio announces that it has dismissed Davide Nicola as first-team coach.
"The club extends its warmest thanks to the coach for his commitment, professionalism and dedication."
Technical director Attilio Perotti, who salvaged the club's second-tier status in the 2011-12 season, could be set to return to the dugout after Spinelli expressed an unwillingness to appoint anybody from outside the club.
