Carlo Ancelotti says Everton are working to "improve the team" by signing new players this month.

The Toffees were beaten by a young Liverpool side at Anfield in the FA Cup third-round on Sunday.

And Ancelotti has hinted there could be some new faces at Goodison Park very soon.

On the January transfer window, which opened last week, Ancelotti said: "We are going to work together to find the solution to improve the team."

Speaking about the loss to Liverpool's inexperienced side, Ancelotti added: "The line-up of Liverpool didn't affect our idea, which was to play a good game.

"We knew Liverpool put fresh players in their team, that the intensity could be high in the game, so I think the defeat arrived because we were not able to keep the high intensity in the second half.

"We lost energy, we lost confidence, we were not able to build up quickly from the back, so for this reason we were not able to keep the same idea we had in the first half to attack their defensive line.

"In the first half we did well and had two or three opportunities where we could score.

"I said to the players at the end of the first half to keep going, to continue to create opportunities but, honestly, in the second half we were not good enough."