Sherwood was given an 18-month contract in December after Andre Villas-Boas was sacked but Sky Sources say he will be moved on in the summer after an inconsistent run of results that has produced nine wins out of 16 Premier League games.
Former Spurs midfield Jamie Redknapp told Sky Sports News that the decision leaves Spurs in "disarray" and that it is astonishing that Sherwood could be axed while Director of Football Baldini - responsible for bringing in a number of players including £30million flop Erik Lamela after the £85m sale of Gareth Bale to Real Madrid - keeps his.
"If it is the case that Tim is going to be leaving, I think he has been [harshly treated]," said Sky Sports pundit Redknapp. "Tim is a friend of mine - I've known him for many, many years - and he is a genuine football person.
"He was put into a position that wasn't easy at the start - a lot of the players that came in at the start of the season just haven't been good enough; what tends to happen is that the managers take the brunt of this. They've gone through two managers already.
"Franco Baldini and Daniel Levy have to take some responsibility because which players have really come in after the sale of Gareth Bale and made an impact? Maybe you could say Christian Eriksen but apart from that there haven't been too many.
"That's what I find hard to understand. If Tim Sherwood does leave at the end of the season, how can a Director of Football like Franco Baldini keep his job? I find that amazing.
"The young managers get the sack and the people that bring the players in don't have any responsibility. I find that staggering in this day and age.
"The club looks like it is in disarray again. It's amazing because it is such a good club; the fans deserve a lot more than they are getting at the moment."
Last week former Spurs manager Glenn Hoddle criticised the club for its transfer policy in the wake of the sale of Bale and Steven Caulker - splashing out on Lamela, Eriksen, Paulinho and Roberto Soldado.
Redknapp said that the hierarchy of the club now have some serious questions to answer.
"I don't know how many managers Daniel Levy has gone through in his time there but he does enjoy sacking managers and sometimes you've got to look at the people close to you, it's not always the managers that are making the mistakes. Sometimes the recruitment could have been better.
"It's been staggering really this summer the players that have come in and all the money that had been spent when you've sold a world-class footballer and brought in six or seven and not one of them has done their job. It's amazing that the people that did that aren't more responsible than the manager.
"As a manager, you go in to a football club and you're reliant on people to bring in good players and it just hasn't been the case.
"A few years ago, that was completely different and I think that's what the problem is - they're selling all their best players and trying to bring in different players that suit the chairman's wage structure. If you want to progress as a football club, unfortunately you have to pay big wages now.
"When they had their opportunity last summer to really push on and see if they could get in to the top four, they've missed around with it and had a go, sort of, and it hasn't worked at all.
"They sold Gareth Bale, who's probably the best left-sided player in the world, and they've not even bought a left-sided player to replace him and that all boils down to bringing the right players in.
"If you're going to have a Director of Football, he's got to know what he's doing, he's got to bring in the right players and if not he's got to say to the manager, 'OK, you do it'.
"At the moment, it's not really working for Tottenham and I think Daniel Levy enjoys buying the players as well and I think that's the problem. He's an owner and a fantastic shrewd businessman but when it comes to knowing footballers, I don't think that's really his game.
"They were doing brilliantly a couple of years ago and now you look at clubs like Everton who are going past them quickly and that isn't Tim Sherwood's fault, that isn't Villas-Boas' fault, I think that's because of the players they are bringing in who aren't quite good enough to play for Tottenham.
"Because no one came out and said anything, I always felt Tim was a dead man walking there."
Louis Van Gaal is the odds-on favourite to replace Sherwood while Frank De Boer and Southampton manager Mauricio Pochettino are both at 10-1, while former Swansea manager Michael Laudrup is at 16-1.
"It's irrelevant who they get next (manager), the most important thing is that they get the recruitment right and they start to bring in players that the manager wants because you can bring in anyone to work with that group of players that they've got and they would struggle to get the top four," said Redknapp.
"They've got ideas of grandeur there, that's the problem. They think they have a divine right to be in the top four and the players aren't good enough. They've done it twice in the last 20-odd years, so all of a sudden they start thinking this is going to happen every year.
"At the moment, I look at them and I think they are miles off and until they get that right it doesn't matter what manager they bring in - because Daniel Levy will keep sacking every manager they bring in.
"Van Gaal, Pochettino - they're good managers; they're not silly. They'll look at this and say 'I've got a good reputation at the moment, I could go to Tottenham and really struggle,' and knowing that you don't get a great deal of support; that's not the sort of club that gives a manager a great deal of time and your reputation could be as high as kite and then go to Tottenham, lose a couple of games, get sacked and all of a sudden you're scrapping around for another job."