Pep thinks that the players he signed to replace these players he let go can perform to their standard or above their standards, but they couldn't, and the team is becoming unbalance if one or two players get injured especially Rodri. I think things will become better since their main man KDB is back from injury and will soon start playing with the rest of his team mates.
I'm very sure pep is still very much in control of the team so much that every decision he takes is well calculated and in the best interest of the club but then it may look like letting go of some of the players will affect the teams performance and that's not the case as he has tried it before and it seem like it worked for him.
There are times this season he had played with out his big names and yet ws able to secure some good wins which means with out any of some of these players he can still perform moreover he has still got haland and KDB present with his strategy he will be able to get them to achieving what he would achieve with his team because he has still got the kind of players he still needs to achieve that he wants to achieve. Manchester city still looks very much promising across all the leagues in which they are participating so let's give them a few more time.