Toto Wolff believes Mercedes need to make "radical" changes after suffering "one of the worst days in racing" at the season-opening Bahrain Grand Prix.
Red Bull dominated in Sakhir on Sunday, Max Verstappen leading a one-two ahead of Sergio Perez.
Lewis Hamilton could only finish fifth and his Silver Arrows team-mate George Russell was seventh in the first race of 2023.
Seven-time F1 world champion Hamilton crossed the line 50.977 seconds after Verstappen, who is a strong favourite to clinch a third consecutive title.
Tough night for the whole team, but we’ll stick together no matter what. pic.twitter.com/nZISblbtol— Mercedes-AMG PETRONAS F1 Team (@MercedesAMGF1) March 5, 2023
Mercedes team principal Wolff knows his team are unable to challenge Red Bull and must go back to the drawing board.
"One of the worst days in racing," Wolff told Sky Sports F1.
"Really not good at all, we were just lacking pace front, right, and centre.
"Red Bull is just on a different planet. That is what hurts because they are so far ahead, it reminds me of our best years because we just put a second on everybody else.
"That is the benchmark and we have to do one step after the other to come back and we can do that. We can, absolutely we can.
"I think it needs to be much more radical in the steps than hope for a three-tenths upgrade."
The second race of the season will be staged in Saudi Arabia on March 19.