I hate to repeat myself, but the way to start turning this around is to trade away Matsui and Cano. Matsui, in my opinion, is either past his prime or still recovering from the wrist injury. Either way, his trade value for the last year and a half of his contract would be better then having him for the year and a half. On top of everything, he is an awful outfielder.
Cano also really bothers me. He was getting away with his free swinging ways, the first two years, but now pitchers have adjusted to him, and he has failed to readjust. His OBP really hurts this team, and he has not developed the power that I thought he would.
EDIT: Jackson, I really don't think the pitching is the problem. The offense is really struggling, no matter how many total runs they've scored this year. The ineffectiveness of many of the Yankees hitters, is not due at all to Joe Torre.