The Black Cats head for Everton on Saturday having won just one of their last 17 league games and having managed just a single shot on goal in last weekend's 1-0 home defeat by Aston Villa.
That, coupled with a tame Capital One Cup exit at the hands of derby rivals Middlesbrough, has left Martin O'Neill's men in the firing line, but the Sweden international is confident they have the ability to drag themselves out of their current slump in form.
Larsson told the Sunderland Echo: "You could see, especially against Villa, once we got into situations where it's time to create stuff, the confidence is not there.
"We get a bit tentative and a bit nervous and we end up not creating anything at all.
"That's what the manager has been speaking to us about, to try to play with more freedom and not worry so much.
"That's where we need to get to. We have definitely got the players to create things and score a lot more goals, but we are not doing it at the moment.
"It's one thing talking about it, but we have got to show it on the pitch. Obviously, in the last week with two very disappointing defeats, that's on everyone's mind at the moment.
"We are well aware that we haven't lived up to expectations yet, but hopefully we can turn that around very soon."