The Red Devils lacked a creative spark at Old Trafford in a 1-1 draw that saw the club make their worst ever start to a Premier League season.
Pogba, who was heavily linked with a move away from the club over the summer, failed to make much of an impact against the Gunners, with Schmeichel adamant changes are needed to get the best out of him.
"He's playing very, very deep and I don't understand what his role in this team is," Schmeichel told Optus Sport.
"Even when Ole made the substitutions and put Pogba further forward, not a lot happened. I agree there were two very good passes from Pogba in this game but it's two, it's not 15 and I kind of see that as a problem because he takes up so much attention and it kind of feels like he's the problem child in this team.
"When you have someone who takes up so much attention from newspapers, from when we talk about him, we need to understand what is his role. What is it that he's going to do for this Manchester United team? At the moment, I'm kind of confused and I don't understand it.
"I think the players are good enough around him but he wasn't looking enough for the ball, he was hiding a little bit in the first half. In the second half it was a little bit better.
"He's not playing in the same way he did last season for sure. I think they need to find out what his role is and how Manchester United should play with him in the team and then it should be communicated to everyone. You know the 75,000 here, they're not really too happy with him to be fair, you kind of hear that around that people don't like Pogba that much because he doesn't do much for the team.
"We've seen his world-class quality and how do we get him to perform like that in this Manchester United team? That's something they've really got to work on."
Former Arsenal and United striker Robin van Persie agreed with Schmeichel and believes Pogba needs to be allowed to play in between the lines to ensure the club get the most out of him.
“For him, the coach, for us, for everyone, it's just important to choose a position,” Van Persie said.
"Choose where you think, and the coach thinks, he plays the best football for himself and for the team.
"I would play him not as a defensive midfielder, and not as a number 10 but in between - [the] number eight position. So, he still has his freedom, he’s not judged then on 20-plus goals a season, if he scores 10-plus goals, makes assists, everyone will look differently at him then, but it needs to be clear for everyone."
After the 1-1 draw, the Red Devils are currently sitting 10th in the league, three points shy of Arsenal, who are now fourth.