Assistant manager Terry McDermott conceded Birmingham can forget about reaching the npower Championship play-offs if they do not improve their home form.
City slumped to their fourth home league defeat of the campaign after going down 3-2 to Hull, with Sone Aluko returning to haunt his old club with a brace.
Aluko's double and another goal from James Chester put Hull 3-0 up after 33 minutes, and although Birmingham managed to pull goals back through Ravel Morrison and Marlon King, the visitors held on for victory.
It was only Hull's second win at St Andrew's in over 100 years and left Birmingham seven points above the relegation zone and eight adrift of the play-off places.
McDermott, deputising for manager Lee Clark who reportedly lost his voice during the game, said: "We are all devastated. The only thing to be pleased about was showing some character to come back with two goals.
"To go three goals down a lot of teams would have thrown in the towel but they kept going. We gave it go but to concede three goals at home is not acceptable. If you don't win your home games you are not going to be in the play-offs. We know what is wrong and we will put it right. You should not have to score four goals at home to win."
For Hull manager Steve Bruce, the win was a sweet one on his return to the club who he twice guided into the Premier League during his time at St Andrew's. Bruce singled out Aluko for special praise and also hailed the rest of his side for their first-half performance.
He said: "It was an unbelievable turnaround. But credit to Birmingham they stuck at their task just when I thought the crowd would turn against them. They played their part. Birmingham kept flying the ball into big (Nikola) Zigic and that is the best I've seen him play.
"The team talk at half-time was to keep it tight and they scored again after 12 seconds. It just shows what rubbish you talk.
"But I thought some of our football in the first half was very good. I have some really good players and the way Aluko is playing is there a better player in the championship? He has been excellent for us."