Sick/Sad Phal. repot in smaller pot?

[Anthony]

At the end of July I bought this red Phal.


Her last flower fell off about a month ago and I have then repotted the plant into new mix (the old mix had algae and moss on top)

Now, when doing my round I noticed there were no new tips showing. On closer inspection there were mushy roots inside so I took her out of her pot and was shocked to see I had to remove 1/3 - 1/2 of the roots.

The roots that are left look good but aren't in top shape. What should I do? I also think the pot should be smaller now to avoid too much mixture vs roots.

Original pot was 12cm (left), the one size smaller pot I have is 10cm (right).