The Bulls fired Hoiberg after a 5-19 start to the season, including nine losses in their past 10 games.
The Bulls have lost six straight and 10 of their last 11 as they head to IN for a matchup against the Pacers on Tuesday night.
Hoiberg, 46, was hired by the Bulls in June 2015 and the team has been to the playoffs only once in his four seasons as coach, losing in the first round to the Boston Celtics in 2016.
The Bulls promoted associate coach Jim Boylen to head coach. Hoiberg ends his tenure with Chicago with a 115-155 record and one lone playoff appearances.
Paxson also said the Bulls are committed to Boylen as their long-term head coach and that general manager Gar Forman is "absolutely safe".
The circumstances were different, but the results were disappointing.
The 53-year-old Michigan native has been an assistant coach in both college and the National Basketball Association for most of the last 30 years, getting his first gig at Michigan State University in 1987. The Bulls used that pick for 7-foot power forward Lauri Markkanen. Derrick Rose, Jimmy Butler, Pau Gasol and Nikola Mirotic were among the departures as the Bulls tried to find the right formula. Bobby Portis (right knee) and Kris Dunn (left knee), who are expected to return within the two weeks, would've allowed Hoiberg to coach the team he had worked with this summer.
Hoiberg played four seasons in Chicago and has a long history with Forman.
"He did a good job with the individual players", Paxson said. We need a voice and someone who can at least try. When you bring in a coach with a particular style of play and are about to embark on a rebuild, you generally want the personnel to match. He said all of the assistant coaches will be retained and he will add G League Windy City Bulls coach Dean Cooper to the staff.