Pearce had been confident both would travel to the finals in Denmark upon naming them in a 40-man provisional squad earlier this month but neither have made the final 23.
He said: "I spoke to Jack last week and he explained that while he told me in March that he wanted to be part of the squad, he now feels he is not in the best condition to take part in the finals.
"That is based on the number of games he has played for Arsenal this season, sports science data which Jack was presented with last week and concerns he has for his fitness looking ahead to next season.
"Jack has always expressed his enjoyment at being involved with the under-21 squad, and while I am disappointed not to have him with us for the finals I've accepted the situation."
He added: "I am very conscious of the importance of looking after all our players, and that is why I have frequent conversations with club managers throughout the season.
"I believe that representing your country in international development tournaments can be a great advantage to players, and increases the chances of being successful at senior level."
England U-21s squad for the UEFA U21 Championship in Denmark next month:
Fielding (Derby), Steele (Middlesbrough), McCarthy (Reading); Bertrand (Chelsea), Gibbs (Arsenal), Jones (Blackburn), Mancienne (Chelsea), Richards (Man City), Smalling (Man Utd), Walker (Tottenham); Albrighton (Aston Villa), Cork (Chelsea), Cleverley (Man Utd), Henderson (Sunderland), Lansbury (Arsenal), Muamba (Bolton), Rodwell (Everton), Rose (Tottenham); Sinclair (Swansea), Delfouneso (Aston Villa), Sturridge (Chelsea), Welbeck (Man Utd), Wickham (Ipswich).