However, the board decided to give him time, at least until the summer, to prove he could turn things around.
Unfortunately, he was taken to hospital a few weeks ago with chest pains and is not expected to return to the club this season. Indeed, there are growing rumours that he will not be returning to the club at all, standing down on medical grounds.
Clearly everybody is wishing Houllier a swift and full recovery, but even if this is the case, questions must be asked as to whether he can continue to put his job ahead of his health. Personally, I would be surprised if he returns next season.
If this were to be the case, Aston Villa would be looking for their fifth manager in less than twelve months, following O'Neill, caretaker manager Kevin Macdonald, Gerard Houllier and his stand-in, Gary McAllister.
Here are 11 of the candidates that are likely to cover the shortlist that Randy Lerner and Paul Faulkner will draw up.