The Gunners slumped to their third Premier League defeat of the season at the King Power Stadium on Saturday evening.
Goals from Jamie Vardy and James Maddison secured a comfortable 2-0 win for Leicester City over Arsenal.
The Gunners are nine points behind Leicester and Chelsea FC in the top-four race, while they’re eight points adrift of defending champions Manchester City in fourth spot.
Arsenal have only managed to win one of their last six Premier League games to heap pressure on Emery following their underwhelming start to the 2019-20 campaign.
Emery has been contending with speculation surrounding his future at the north London club following reports linking the Gunners with Jose Mourinho and Luis Enrique.
Sky Sports pundit Nicholas believes Emery still has more time to turn things around at Arsenal but warned the Spanish head coach the Gunners need to improve before Christmas.
“I am confused with where this is going, and that is created by Emery’s own choices,” Nicholas told Sky Sports.
“If he doesn’t sort it out before Christmas, he does come under scrutiny. The top four was there for the taking, but Man Utd were struggling, Leicester and Chelsea are doing better than anticipated, but you want to be in there fighting.
“Arsenal are hopeless yet are still in sixth, but you have to stay at it and give yourself a chance to fight for those places.
“Emery must go positive to win football matches after international break. If this doesn’t work, he may be out by January – he is hanging on.
“The board will not look to ease him out, but a lot of people are wondering why they should wait.”
Arsenal finished in fifth spot in the Premier League table in Emery’s first full season in charge after he took over the reins from Arsene Wenger in 2018.
Emery signed six new players to improve the Arsenal squad in the summer but the Gunners are still struggling in all areas of the pitch.
MORE: Man United latest news
MORE: Arsenal latest news
MORE: Chelsea latest news
MORE: Liverpool latest news