Hamburg suffered a 5-1 defeat to Hoffenheim on Sunday and Hoffmann insists Labbadia needed to be sacked in order to have a chance of beating Fulham at Craven Cottage on Thursday.
Assistant coach Ricardo Moniz will be in charge for the remainder of the season.
“We analysed the situation and we saw that as things were we would not be able to succeed against Fulham,” Hoffmann told reporters after meeting Labbadia.
“It was the last moment for us to react to keep our Europa League target in sight.”
