The Portuguese has overseen a horror start to the Premier League season which has the reigning champions occupying 16th position on the table after eight matches.
Mourinho has already seen first-team doctor Eva Carneiro leave the club after he publicly criticised her earlier in the season and is now rubbing the players up the wrong way with his team selection among other issues.
Newcastle United great Shearer, writing in his column for The Sun, also feels that Mourinho is now taking on powerful owner Roman Abramovich after saying he would only quit if he lost the faith of the players in the wake of Saturday's 3-1 home loss to Southampton.
"Mourinho has taken on the club doctor and the players and now he seems to be turning his attention to the owner," wrote Shearer.
"It looks to me that there has been a bust-up of huge proportions and nobody has got over it. Everything he has tried to remedy the situation hasn't worked. He has left players out, criticised them in public and embarrassed them.
"And Nemanja Matic was humiliated — brought on at half-time and taken off 27 minutes later. That does not motivate players, believe me, and his team-mates would not have liked it either.
"All Mourinho's stars from last year, Terry, Cahill, Fabregas, Matic, Costa and Hazard are playing badly. You can get a situation where you see one or two drop their levels from a title-winning season but not this many.