Foda, who guided Austria to the knockout stage at the European Championship last year, was hired only in June to replace title-winning coach Andre Breitenreiter, who returned to Germany to join Hoffenheim.
Zurich president Ancillo Canepa cited results in the league and elimination in the Swiss Cup for the decision to fire Foda.
Foda was praised by Canepa for guiding Zurich through Europa League qualifying rounds after losing in the Champions League qualifiers to Qarabag.
Zurich started its Europa League group with two defeats and next hosts PSV Eindhoven on Oct. 6.
The club did not announce an interim appointment as coach.
Foda made his coaching reputation with Sturm Graz in Austria and coached the national team for four years. Austria lost to eventual champion Italy in the Euro 2020 round of 16 at Wembley Stadium, and Foda left in March after losing to Wales in the World Cup qualifying playoffs.
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