The Durban club are bottom of the league table after a forgettable season so far, during which they have managed just two wins in 12 games. The league’s worst attackers have scored just five times.
Palmgren, who took charge at Usuthu last September, will temporarily be replaced by assistant Fani Madida.
“We met the coach this morning (yesterday) and advised him that his services have been terminated with immediate effect and informed the players and the technical team of what has happened,” said general manager Peter O’Connor.
AmaZulu’s season began in the worst possible fashion when they were hammered 6-0 by Kaizer Chiefs on the opening day of the season, a result they never recovered from.
Apart from losing another six times in the league, they were also dumped in the first round of the MTN8 and lost in the quarterfinals of the Telkom Knockout.
Their latest defeat came on Saturday when they were beaten 1-0 by Free State Stars in Durban during Telkom Knockout.
Palmgren took over last season on a results-based deal and after a seventh-place finish, he was rewarded with a two-year contract in the winter, one that lasted a little over six months.