Players stopped playing for him and didn't have confidence in him any more after the Everton saga – he fell out with a few well regarded players in their camp (Capoue, Okaka, Prödl) and several wanted to join him when he said he was going to Everton, then lost their heads.
I hear from the Watford camp that he's a one plan man and is completely clueless when he needs to change things, and is terrible at game management. Got a Watford mate and he says the team selections/eventual substitutions from him were bizarre with dropping players after they'd begun to get a run in the team, he wasn't happy with Andre Gray being dropped whenever he showed any signs of hitting a barn door. From the outside looking in on his game management, think they've lost the most points from winning positions and they had that laughable run of red cards which threw games away for them.
With how they run their club he was probably going to be gone sooner rather than later but it was obviously broken beyond repair, guess if they bin him now they have enough time to pick up the pieces and consolidate top half while the players are all still there