The offense struggled, and the pitching couldn't hold up against a tough lineup that seemed to click at just the right time.
Where do the Yankees go now? Derek Jeter's injury leaves a cloud of uncertainty over the franchise as it transitions into what could be a new era of Yankees baseball.
The offseason will undoubtedly center around the team's big names. General manager Brian Cashman is tasked with rebuilding this team more than he has in past offseasons.
New York is always good for a few big offseason moves, and there could be some that shock fans.
Here are four bold predictions for the New York Yankees' offseason.
The New York Yankees should explore the idea of transitioning Derek Jeter to a role as the team's full-time designated hitter. His defensive range has steadily declined for years, and his move away from shortstop is probably long overdue.
There's no question the future Hall of Famer can still swing the bat. His 216 hits on the year are second-most in his career as a Yankee. He's still a force at the top of New York's batting order, but his defense at one of the most important positions on the field leaves much to be desired.
The number of innings on Jeter's legs is catching up to him, and the team could cut that workload in half if they transition him to a DH role. The captain likely won't be receptive to the idea, but it's what's best for the team.
It doesn't have to be a complete transition. Jeter could be asked to give the team 20-30 games next year at shortstop, while filling the DH duties in the other games.
Does this sound like something the Yankees (or Jeter) would do? No, but it's an idea the franchise must consider at this point.
Texas Rangers' catcher Mike Napoli is scheduled to be a free agent this offseason, and the New York Yankees should be the first team in line for his services.
New York hasn't been getting enough offense from its catching position, and the team's current catcher, Russell Martin, is scheduled to be a free agent. The opportunity to fill the spot with a legit hitter like Napoli is something the team should take advantage of.
Napoli is one of the best sluggers in the game at a premium position. The power-hitting backstop would be much more of a focal point in New York's lineup than Texas'.
Fans witnessed how much punch New York's lineup lacked in the playoffs this year, and the team needs to restore its lineup back to Bronx Bombers status.
The New York Yankees' playoff struggles can be largely attributed to their starting pitching. Signing Ryan Dempster would bring a legitimate No. 2 power arm to New York's rotation.
His age and mileage on his arm will bring his price tag down and allow a number of teams to compete for his services.
Dempster still has the stuff to mow down lineups even at the age of 35. The Yankees have too many finesse arms behind CC Sabathia in the rotation, and a hard-throwing righty like Dempster brings a different look for opposing lineups.
Signing Mike Napoli and Dempster is a lot of cash to throw around (even by New York's standards), but the team has legitimate holes to fill after several key players hit free agency this offseason.
Legendary closer Mariano Rivera will return next season, but it might make more sense for the Yankees to take pressure off of the 42-year-old as he comes off of a torn ACL. Keeping Rafael Soriano in the closer's role is best for the team at this point.
It's hard enough to imagine Rivera being ready to pitch at full strength by Opening Day, and there's no need to force him into a vital role on the team so soon. The future Hall of Famer should first proves he's at full-strength and effective enough to take the role back.
New York fans might've assumed life after Moe would be unimaginable, but it wasn't too bad this past year with Soriano. His 42 saves, 2.26 ERA and 69 strikeouts in 67.2 innings put him up there with the elite closers in the game.
Yankees fans and baseball fans who don't hate the Yankees were devastated to see Rivera suffer the ACL injury, but New York should move on with its transition to Soriano.