After 10 seasons in San Francisco guiding the Giants to the 2002 World Series, Baker moved to Chicago where he was expected to work his magic with the Cubs who have not won a championship since 1908.
But after reaching the NL championship series in 2003, the Cubs never returned to the post-season and sunk to new lows this year with a record of 66-96, their worst since 2000.
A three-times National League manager of the year, Baker compiled a record of 322-326 in four seasons with the Cubs.
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"We have a number of excuses if we want to use them, but we just didn't play well," said Cubs general manager Jim Hendry.
"We certainly had our share of injuries and nothing went right since the end of April.
"That being said, sometimes it just doesn't work, and you have to make a change and move forward.
"For the best interest of the Cubs and where we're at and what we have to do, I just think a change is appropriate."
Baker said he expects to stay in baseball but has no immediate plans.
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