Xhaka delivered a brutally honest post-match verdict, accusing his colleagues of lacking the kind of mentality they needed to get a result in front of a fervent home crowd.
He told Sky Sports: "It's difficult to find the right words. From the first minute to the 90th we didn't deserve to be on the pitch.
"I can't explain to you why. We didn't do what the game plan was, not listening to the coach. What happened was a disaster performance. You don't deserve to play Champions League or even Europa League. It's very hard to take it at the moment. I don't know why we're not doing what the coach is asking for us."
Asked if inexperience in the squad was an issue, he added: "If someone isn't ready for this game, stay at home. It doesn't matter your age. If you're nervous, stay on the bench or stay at home.
“You need people to have the b***s to come here and play. It's one of the most important games for us. We're feeling very disappointed for the people who came over here. Sorry to them [fans], I don't have any other words.
"The dressing room is very quiet. The game plan was totally different to what we did over 90 minutes. We are waiting for six years. We had everything in our hands. We looked like we were in the position where Newcastle are and they were where we are."
In a subsequent interview with BBC Sport, Xhaka doubled down on his comments and suggested the Arsenal dressing room explicitly ignored Arteta's instructions.
"We wanted to have a big game but it didn't happen. It's so difficult to find the right words. If you don't listen to the coach and do your own stuff, it doesn't work.
"People speak always about leaders. We're not playing tennis, we're playing football. If someone is not ready for this pressure, stay at home. You can't come here and play like this. We looked very bad today. The game plan was totally different. We played a totally different game.
"They were running us over from the first minute to the 96th. When you play like this you don't deserve to play in the Champions League. The thing is the pressure. If you can't handle the pressure, it ends like today. It looks like we can't do something against the pressure."
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