Three years after lifting the trophy at Wembley, the European champions looked a shadow of the team that emerged to take the title in 2021.
They were comfortably beaten on Saturday by a Swiss side who advanced to the quarter-finals of the European Championship for just the second time in their history.
A goal in each half from Remo Freuler and Ruben Vargas were enough to hand Switzerland victory, with Murat Yakin's players taking full advantage of Italy's lethargy to set up a last-eight meeting against either England or Slovakia.
Switzerland dominated the ball early on and penned Italy into their half, but it took until midway through the opening period for a first sight of goal.
Breel Embolo timed his run perfectly to remain onside as he raced onto Fabian Rieder's ball over the top. Opening up his body, he sought to bend his effort inside the far post but was thwarted by a diving save from Gianluigi Donnarumma.
The opening goal arrived after 37 minutes. Vargas collected the ball wide on the left and picked out Freuler arriving inside the box. He allowed the ball to skip up into the air via a deft first touch before hammering it in at the near post via a slight deflection from Gianluca Mancini.
Rieder hit a superb free-kick that almost caught out Donnarumma on the stroke of half-time, his bullet effort requiring a flying stop from Italy's goalkeeper to turn the ball against a post and behind.
Italy had been outplayed and within seconds of the restart the score better reflected Switzerland's dominance.
Vargas took possession on the edge of the box and with the defence standing off him he took aim and sent an unstoppable effort spinning beyond Donnarumma's reach and into the top corner, just 27 seconds into the second half.
There was nearly an instant reprieve for the holders when Swiss defender Fabian Schar inadvertently headed a cross against his own post under seemingly little pressure. Goalkeeper Yann Sommer was rooted as the ball struck his upright.
Gianluca Scamacca also hit a post for Italy from only three yards in a rare foray into the Swiss penalty area, but the holders exited the tournament with little resistance as Switzerland march on.
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