Jones fired Phillips on Monday and promoted offensive coordinator Jason Garrett to take his place on an interim basis. Defensive line coach Paul Pasqualoni was promoted to replace Phillips' other role as defensive coordinator.
"I recognized that after the game we just weren't playing winning football and our best chance was to make a change," Jones said. "We are grateful to Wade and his contribution to the Cowboys, leading us. We also clearly understand we are not where we want to be at this time, and that's an understatement. We share the responsibility - all of us."
It's the first time Dallas has made an in-season coaching change. Garrett becomes the first former Cowboys player to take over the job previously held by the likes of Tom Landry, Jimmy Johnson and Bill Parcells.
The defense has allowed at least 35 points in three straight games, something that hadn't happened to this team since going 0-11-1 in its inaugural season, 1960. Stranger still, the unit features nearly all the same players who closed last season with the first back-to-back shutouts in club history.
Jones said his deciding factor was the defense's erosion the last three games - bad against the Giants, worse against Jacksonville and trampled by the Packers, who actually backed off from scoring more than 45. Jones said he'd been "in denial" that the club was in such bad shape.
"It really was paramount in my thinking that we would make adjustments and have our defense more productive and demonstrate a correction," he said. "But I really might not be sitting here today if we had gone and played well against Jacksonville ... and then we'd gone to Green Bay and played lights out defensively."
This is the Cowboys' worst season since 1989 and among the worst in franchise history by record alone. It could go down as the worst-ever considering Dallas was coming off a division title and a playoff win, and was expected to contend for the Super Bowl that'll be held at Cowboys Stadium.
"I told (players) they should not think this an admission of defeat or finality in this season," Jones said. "We have eight games left and we have one goal - to win."
Jones was clearly unhappy and uncomfortable. He spoke slower than usual, with longer pauses to collect his thoughts, and fiddled with his glasses throughout a 22-minute news conference.
He called Phillips "somebody we thought so much of" and "a good friend, as well." He wouldn't provide details of his conversation with Phillips, and became emotional as he described breaking the news to the team. He said the focus of that speech was accountability.
"I spoke of the realization that it's not just about yourself," Jones said. "It impacts others."
The 63-year-old Phillips leaves with a 34-22 record over 4 1/2 seasons guiding the Cowboys. He also was 1-2 in the postseason. Dallas won the NFC East twice on his watch.
Phillips released a statement thanking the fans and the Jones family "for all of the support" and thanked his coaches and players "for their loyalty and dedication."
"I told the team today that I have been proud to be a part of their family and that will never change," Phillips said. "I am disappointed in the results of this season to this point, but I am also very proud of what our team and our players accomplished in the previous three years. In good times and difficult times, our players stuck together and never lost hold of their belief in each other and the strong team bond that they have shared."
The first game under Garrett will be at the New York Giants on Sunday.
Jones said Garrett will have an opportunity to keep the job permanently.
"If we do outstanding as a team and we have very visible, tangible success, then certainly that's doing your job, if you will, in a crisis situation," Jones said. "That kind of action goes beyond a resume."
Garrett has been viewed as the team's coach-in-waiting since he was hired - days before Phillips, in fact.
The 44-year-old Garrett was a backup quarterback behind Troy Aikman from 1993-99. He was the quarterbacks coach in Miami in 2005-06 before rejoining the club in 2007. He's had the title of assistant head coach since 2008, when he withdrew from other interviews to remain with the club.
His father, Jim, was with the organization for 22 years. Two of his brothers are on his staff: tight ends coach John and Judd, the director of pro scouting.
"I do believe Jason has the temperament, he has the disposition to affect a culture change," Jones said. "I think this is important. We know all men's styles are different. His style is one that I feel can be very effective."
Garrett was No. 2 on the coaching depth chart. However, his unit hasn't been much better than Phillips', and that goes back to before starting quarterback Tony Romo broke his collarbone on Oct. 25.
"I think he's very consistent, very to the routine. I like him as a coach," receiver Miles Austin said. "Hopefully it changes things for the better."
This leadership handoff wasn't very smooth.
Jones told Phillips around 1:45 p.m., shortly before players arrived to team headquarters. The story was first reported about that time by KTVT of Dallas-Fort Worth, so many players found out through the media.
About 2:15 p.m., Phillips walked through the hallway and said nothing was going on, that he was just going to check on injured players; he indeed went to the training room. Players finally heard it officially from Jerry and Stephen Jones around 3 p.m.
"It feels terrible that it has gotten to that point at the midpoint of the season," quarterback Jon Kitna said. "We have a chance to do something about it going forward. But it doesn't change magically overnight. ... I've said it since I got here - this is the most talented team I've been around. But talent isn't the only ingredient."
Defensive players took it even more personally because they worked closest with Phillips.
Jay Ratliff went from a backup defensive lineman under Parcells to Pro Bowl nose tackle under Phillips, so he was especially upset. Asked what went wrong, he said, "Nobody knows."
"We fought like hell for him," Ratliff said. "Things just didn't go our way."
Just about everything has gone wrong this half-season. The constant has been mindless mistakes: penalties, turnovers and other breakdowns befitting an expansion team, not one of the highest-paid rosters in the NFL. Phillips couldn't get them to snap them out of it. He tried being loyal instead of benching the guys who were underperforming the most. That only seemed to make things worse.
Jones had steadfastly supported Phillips throughout this tailspin, even saying late last week that Phillips would keep the job the rest of the year. The first five losses had all been by a touchdown or less, which showed players were still fighting. But a second straight humiliating loss left Jones with little choice. Something had to change to spark interest in the final eight games.
"There are a lot of people that certainly are going to suffer and suffer consequences," Jones said Sunday night.
Phillips' career record as a coach with Dallas, Denver and Buffalo is 79-57, but only 1-5 in the postseason. He had only one losing record in eight full seasons. Counting a 3-4 mark over two stints as an interim coach, Phillips has 82 regular-season wins, matching the total of his father, former Houston and New Orleans coach Bum Phillips.
Speculation will persist on the club's next permanent leader. Obvious candidates include former Super Bowl winners Bill Cowher and Jon Gruden, both working in broadcasting.