Such a disappointing ending could mean some key players from this year's team won't be back next season.
Let's take a look at the chances of each Yankee returning next season.
The Captain had another great year in 2012, proving that even at the age of 38, Jeter is still a major producer for this ballclub.
There's no doubt he'll be back at shortstop in 2012 as long as rehab on his injured ankle goes according to plan.
A-Rod's playoff performance was about as bad as you can get, but it will be difficult for the Bombers to move his contract in the offseason.
If there is any hope of making such a deal, the Yanks would have to pick up a large portion of Rodriguez's contract, not to mention all the bonuses he's owed for home run milestones coming up.
New York will explore the option of moving Rodriguez during the winter, but expect the troubled slugger to be right back at third base for the Bombers in 2013.
Tex wants to be a Yankee for life, and that's exactly what he'll be for the foreseeable future.
The Yanks' first baseman continues to produce offensively, while his defense remains second to none in the MLB.
Teixeira will remain a fixture in the middle of the Bombers batting order once again in 2013.
Sabathia is this team's ace and that won't change in 2013.
Battling injuries and some inconsistency, Sabathia had an up-and-down season that culminated in two great playoff starts and a dud.
The Yankees ace will get his elbow looked at during the offseason and could require some work to get ready for next season, but that shouldn't stop him from being ready for spring training in 2013.
Pettitte is still very effective at the age of 40, and that has to make it even tougher for the Yankee legend to walk away from the game.
In 2012, Pettitte had to deal with a freak injury that had him in the trainer's room for much of the season, but once again returned to special form at the end of the season and in the playoffs.
It all depends on whether Pettitte has another year in him. The door will always be open from New York's end, the veteran just has to make the decision.
Rivera's 2012 season was cut short due to a freak injury incurred while shagging fly balls before a game in Kansas City. It was a devastating blow for a Yankee legend, who was thought to be playing his final season in the bigs.
But even Rivera has said he can't go out like that (via Jeff Passan of Yahoo! Sports), so barring any setbacks in his recovery, the Sandman should be closing out games for the Bombers in 2013.
Cano had a historically bad postseason, but that still doesn't erase how great of a player he was during the regular season and how bright his future is with this team.
The Yanks have a club option they can pick up for Cano for 2013, but chances are the Bombers will try to work out a long-term deal that will keep Cano in pinstripes for years to come.
After joining the Yankees, Ichiro no doubt proved he can still play at a high level in the MLB.
The Yankees would love to have him in the outfield and batting next to Jeter for an entire season, making it likely there is a lot of interest in bringing him back.
It will all depend on the price and amount of years Suzuki is seeking, which is yet to be known. But the situation is right for both sides, so it's likely a deal will be worked out to bring Ichiro back to the Bronx in 2013.
Soriano did an incredible job for the Yanks in 2012 as a replacement for Rivera, but it appears Sori will opt out of his current deal when the time comes (via Joel Sherman of the New York Post).
The Bombers do owe him a boatload of money for 2013 ($14 million), however it looks like Sori will have return to the seventh inning role with the existence of Robertson and the returning Rivera.
Soriano wants to be a closer and after the season he's had, he will garner major attention as a top closer on the free-agent market. The potential for a multi-year deal as a closer for another team will be too much to pass up.
After another bad postseason that drew anger from fans, it looks like Swisher has worn out his welcome in the Bronx.
To make matters worse for himself after poor play in October, Swish criticized the fans after Game 1 of the ALCS, instantly making himself a target then and in the future.
On top of that, Swish was reportedly seeking a Jayson Werth-type deal and he simply isn't worth that much money. The Yanks will part ways with their outfielder in 2013.
The Yankees have already picked up Grandy's option for 2013, so at the very least he'll be back in the Bronx for one more season. That seemed up in the air after Granderson didn't show up in the playoffs this season.
The possibility remains that the Yanks trade Granderson during the offseason if they can find the right deal, but chances are Granderson will get one more shot to earn a multi-year deal from the Yanks after this season.
While the Yanks pitching staff battled injuries all year, Kuroda was the rock in the starting rotation and was always ready to take the ball every fifth day. He was easily the Bombers best pitcher in 2012.
Kuroda is getting up there in age, but clearly he's still having success and the switch to the AL East was no problem. Kuroda is perfect for the Yanks' 2014 payroll plans because he will likely garner a one-year deal, although expect his salary to go up after a stellar 2012 campaign.
It's easy to kill Martin over his abysmal average in 2012, but the Yanks backstop still drives in a solid amount of runs for a catcher.
Adding to his value, Martin is also great with the team's pitching staff and can hold his own defensively. The money will have to be right, but I expect Martin and the Yanks to work out a multi-year deal as the team waits for Gary Sanchez to take over.
The Bombers signed Garcia in the offseason as starting rotation insurance and while he got off to a bad start, Garcia did make some solid spot starts during the season to fill voids left by injury.
But Garcia's best days are behind him, and it's unlikely he'll be looking to come out of the Yanks' bullpen once again considering he wasn't happy about it last season. Garcia will move on to a team where he has a chance to start in 2013.
Hughes is up for arbitration in 2013 and while he's likely to garner a raise, the right-hander will be back in the Bronx after a promising season.
The Yanks have had high hopes for Hughes ever since he came to the majors and 2013 will be the end of the road for those hopes. Either Hughes becomes somewhat of the pitcher the Bombers hoped, or he moves on to another team in 2014.
Gardner is still arbitration-eligible for 2013 and 2014, so he isn't going anywhere. The Yankees outfielder spent the majority of the 2012 season on the shelf, returning just in time for the postseason.
If Gardner's importance to this team wasn't known before, it is now thanks to the Yanks' inability to score runs with anything other than a home run. Look for Gardner to add a much needed element of small ball to this team next season.
Jones is a solid reserve for the Yankees to have on their bench, but he could very well be a starter on a worse team.
It remains to be seen what Jones wants his role to be in 2013, but there was talk that he wanted to see increased time on the field prior to this season and that desire leaves his return up in the air.
Logan is up for arbitration this offseason, so he will be back in pinstripes next year.
The Yanks' left-hander is still a favorite of manager Joe Girardi out of the bullpen, but Logan will have to audition for a spot on the 2014 roster during the 2013 season as he becomes a free agent next winter.
Chamberlain spent half the season on the shelf while recovering from Tommy John surgery and a freak ankle injury. Joba was mostly ineffective during the regular season, but he recovered in time for October to have a strong showing in the playoffs.
If all goes well, Chamberlain could see an increased role out of the bullpen next season if Soriano decides to opt-out.
Joba will be up for arbitration during the offseason and while his return is certain, 2013 will be his last chance to show he deserves a contract with the Yankees in 2014.
Robertson might not have had as great a season as he did in 2011, but 2012 was still an extremely effective season out of the 'pen by normal standards.
D-Rob will go through arbitration with the Bombers during the offseason and is still very much in line to become the Yanks next closer.
If not for Ibanez, the Yanks might not have made it to the ALCS. His heroics during the postseason no doubt left a lasting impression on the organization, especially for the cool price of $1 million.
Ibanez was very productive for the Bombers in the regular season and did exactly what the team paid him to do. He could garner a raise during the offseason, but it will still be a realistic price for what Ibanez brings to the table.
Chavez is no doubt a top-tier reserve player in this league, but his impressive 2012 numbers off the bench could have the third baseman thinking starter in 2013.
The Yanks already have that position filled, so starting isn't an option on this team. Chavez will have to be content with remaining as a backup, but it remains to be seen if that's what he wants to do.
Pineda has yet to take the mound for the Bombers after a 2012 filled with injury and off-the-field troubles.
In an interview with Ian O'Connor on ESPNNewYork 98.7FM (per ESPNNewYork.com), general manager Brian Cashman said Pineda could be out until June 2013, which is a date much later than originally expected.
There has been nothing but doubt surrounding Pineda since joining the Yankees, so his return is about as uncertain as some of the team's free agents at this point.
Nova had some growing pains in 2012, but after a great rookie season in 2011, the Yanks won't be giving up on him anytime soon.
On top of that, Nova is under team control for several more seasons, so expect New York to continue to see if he can return to past form.
Nunez spent much of 2012 dealing with an injury, as well as trying to solve his fielding issues in the minors. But if he can show improvement, Nunez will be a major contributor off the bench next season.
It's the young shortstop's bat that is the most attractive part of his game. The only question will be if he can provide the necessary consistency in the field to help give guys like Jeter and A-Rod a breather at DH once in awhile.
As one of the Yanks' half-inning guys, Rapada had a solid season out of the 'pen in 2012. That could land the left-hander a bit more cash in 2013.
Girardi loved to use his lefty specialist frequently just to get an out or two, and that's a luxury the Yankee skipper would like to hold onto next season.
Another one of Girardi's half-inning pitchers, Eppley was solid out of the Yanks' bullpen in 2012.
But Eppley is a little less special to this team being that he is a right-hander and is easier to replace. That leaves his future with this team uncertain, although the Yanks will strongly consider him.
Aardsma spent 2012 recovering from an injury, something the Yankees fully expected. It was thought that the move to bring Aardsma to the Bronx was in preparation for the future, not the present. Aardsma has a club option for 2013.
With Soriano likely to opt-out, that will leave another hole in the bullpen the Yanks need to fill and Aardsma's name will certainly be in the conversation to do just that, making it likely the Bombers pick his option up.
Stewart was a serviceable backup for the Yanks in 2012, and even put up slightly better numbers than expected at the plate.
The Bombers do have Austin Romine and Francisco Cervelli as potential options to back up whoever is starting next season, but don't be surprised to see Stewart return in 2013.
Phelps did a great job out of the Yankees bullpen and as a spot starter this season. The 26-year-old will have a great shot to make the team out of spring training in 2013.
Phelps is under team control for the foreseeable future, so expect him to be a fixture on the Yankees in whatever fashion they so choose.