Mikel Arteta’s side lacked inspiration and impetus in the second leg at the Emirates, despite Pierre-Emerick Aubameyang twice striking the post, as the Gunners failed to score a decisive goal.
Defeat leaves Arsenal facing the very real prospect of a first season without European football for 25 years, with their only hope of qualification now resting on the Premier League, in which they are currently languishing in ninth.
“I hope that this is the rock bottom and it can change from here. But it needs investment to ensure that,” said Ljungberg.
“It really, really hurts but I think there needs to be a change in how they invest into the club, and change the pattern that we get worse and worse every year.”
Arteta admitted he was “devasted” by the result with pressure on the head coach set to be in short supply next season.
“Really disappointed,” he said. “We have to congratulate Villarreal. We tried everything until the last minute. I think we deserved to win the game but the details define these ties.
“We had three big chances, they didn’t have anything but they are through. So many things happened to us, and so many players were just trying to compete not at their best.”
Villarreal will face Manchester United in the final after their 8-5 aggregate victory against Roma.
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