The north London club dropped to ninth in the Premier League, nine points below their tally at the same stage last season.
And Emery is now under increasing pressure for the poor run of form, with many fans now calling for the Spanish boss to be relieved of his duties
Former Arsenal skipper Adams, who made over 500 league appearances for the north London club, has joined the growing list of high-profile names calling for Emery to be dismissed.
He told BT Sport: “I’m just smashed to bits with the performance. At one point Ozil was sweeper, getting the ball off his keeper and trying to run it through everybody.
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“The boos are deserved – it was a terrible, terrible performance, very disjointed, no defending in sight.
“That’s a really poor performance and I don’t want any coach losing his job, but the club’s not going forward, it’s not progressing.
“I can put a team together that’s more organised than that!”
Adams continued to suggest the club were going backwards under Emery and he singled out David Luiz for particular criticism in the build-up to Southampton’s opener from Danny Ings.
He added: “They’re all sleeping, look at Luiz here. What is Luiz doing? He’s just standing there.”