At 3.22 PM, 35 Ju87 dive bombers led by Oberst Werner Ennecerus attack British cruisers HMS Gloucester & Southampton 120 miles East of Sicily. HMS Gloucester is hit by a 500kg bomb which goes through 5 decks and out through the hull without exploding (9 killed, 13 wounded). HMS Southampton is hit by two 500kg bombs (98 killed) which start fires, knocking out the controls to flood the magazines and threatening a devastating explosion. 727 crew abandon ship at 7 PM and are rescued by HMS Gloucester and destroyer HMS Diamond. HMS Southampton is finally sunk at 8 PM by a torpedo from cruiser HMS Orion. The Excess convoy reaches Malta and Alexandria safely but carrier HMS Illustrious is badly damaged and 1 cruiser and 1 destroyer have been destroyed. Lack of air cover means the Mediterranean is no longer controlled by Royal Navy (or the Italian Navy) but by the Luftwaffe.
Albania. Italian 7th Infantry Lupi di Toscana ("Wolves of Tuscany") Division and the remnants of 3rd Alpine Julia Division launch a counterattack on Klisura Pass, captured yesterday by the Greeks. They are beaten back with heavy casualties including a battalion of Lupi di Toscana which is encircled.
Hitler issues Führer Directive 22 sending German troops to Libya and Albania, to prevent Italian collapse and frustrate British ambitions in those regions. Along with operational orders from Chief of Staff Wilhelm Keitel on January 13, this creates the Deutsches Afrikakorps.