In preparation for the 2012–13 season, Gannon signed defenders Sean Newton and James Tunnicliffe, and took back Paul Turnbull on loan once again. However, he was disappointed to lose striker Tom Elliott, who rejected a contract offer to switch to Cambridge United. He also appointed long-time associate Alan Lord as his assistant. However County found themselves struggling in the league, and Gannon blamed the predicament on the board's decision to slash the wage budget in the summer. An angry Lord Snape told the press that "I'm getting pretty fed up of watching part-time teams beat Stockport County. Changes are going to be made unless things improve. Jim Gannon's pretty good at telling me how this club should be run. Well I'm going to tell him that I'm not impressed by the way the team is being run. If we lose a couple of our next games, we're in a relegation battle with a much bigger budget than most of the teams down there with us, which quite frankly is not good enough." Fourteen months into his second spell at Edgeley Park and with County sitting in the relegation zone, Gannon was relieved of his duties as Stockport manager on 16 January 2013 following the 3–1 home defeat by Mansfield Town.