The club have won one National League game since early October and are seven points from safety.
Saturday’s 2-0 defeat to Rochdale was the club’s fourth defeat in five as they struggle to adapt to life back in the division after ending their seven year absence.
Penn was the man to end their exile against all odds, sitting in 14th in the National League North in early April, their stunning transformation resulted in a first promotion in over 20 years via the play-offs.
But like the other three sides to go up, they have been unable to acclimate and sit in the bottom four.
Chairman Richard Lane hopes for a change of fortune with a new person at the helm as they prepare for back-to-back home games with Altrincham and Aldershot Town.
He told the club’s website: “I want to place on record the thanks of everyone associated with our club to Russ for his tremendous effort and dedication over the last few years and the incredible memories we will all keep with us.
“This is a difficult decision to have taken but one we feel is necessary in our current circumstances. Nonetheless, Russ leaves us with our full respect and will always be welcome at Kidderminster Harriers.”