Toto Wolff was left disappointed with Mercedes performance in qualifying for the Austrian Grand Prix, claiming the team "underperformed" their expectations.
Mercedes has finished on the podium in the last two races of the season, with their car upgrades proving to be an important step in closing the gap to Red Bull.
But as both Ferrari and McLaren brought significant updates to their cars this weekend, it appears to have had an impact on the running order.
Charles Leclerc and Carlos Sainz start ahead of Hamilton in P5 along with Lando Norris, while George Russell starts from P11 after getting his lap time deleted.
When asked his thoughts on the session, Wolff told Sky Sports: "Underwhelming."
"We came with expectations that we would be fighting for P2 and P3 with the Ferrari's or the Aston Martin's and we underperformed."
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Wolff expects Silverstone upgrades to put Mercedes ahead
Many of the teams fast-tracked their updates to Austria due to the amount of points on offer for the Sprint weekend.
Wolff expects the gap to swing in Mercedes' favour when they introduce a new raft of upgrades at the next race in Silverstone.
"You see that the time gains are not huge, you're talking two tenths up and down. It makes a big difference," he explained.
"We're bringing something to Silverstone and it looks like hopefully it has an impact like it had on the McLaren and the Ferrari's today."