Ritchie was appointed to succeed Paul Hart as manager in May 2005 after a successful spell as caretaker boss. But despite winning promotion through the play-offs in May, the Tykes are second from bottom of the Championship. A lengthy statement on the club website said the decision to terminate Ritchie's contract with immediate effect was taken "with regret".
"The decision by the board follows the failure to resolve differences with the manager concerning the need to strengthen the first-team squad to ensure survival in the Championship. In the close season, the board had earmarked funding specifically for squad strengthening. It will be clear to fans that the desired strengthening of the squad has not been achieved.
"Recently the club entered into contract negotiations with the manager and as part of these discussions, was seeking a commitment to squad strengthening. Rather than creating a basis for a compromise in views, these discussions served to emphasise the difference in opinions on how the club can best maintain Championship status. As a consequence, the board felt it had no alternative to the decision it has taken."
Welshman Davey had spells with Swansea, Carlisle, Preston and Darlington during his playing career. After retiring in 2000, Davey moved into coaching with Preston and took up his role with Barnsley's academy in the summer of 2006. But it was not long before he was asked to become caretaker manager following Ritchie's departure. Davey spent two and a half years at Brunton Park, where he made 137 starts and scored 23 goals before he was sold to Preston North End for £125,000 in February 1995.