The New York unit of the Bentonville, Ark., retail titan offers fast product delivery through text message.
It will try to rebrand and will no longer be a personal-shopping service, people familiar with the situation told Dow Jones Newswires.
"We’re moving Jetblack from incubation to join our broader business as part of the customer organization," a Walmart spokesman said via email.
"We’ve learned a lot over the past two years, including how customers respond to the ability of ordering by text as well as the type of items they purchase through texting.
"As part of this evolution, Jetblack will discontinue service for members in New York City on Feb. 21. After that, we’ll focus on how to leverage Walmart’s infrastructure to make conversational commerce scalable."
The Wall Street Journal reported that Walmart would cut 293 of Jetblack's 350 staffers.
Last year, Walmart worked to spin off the unprofitable unit, which had less than 1,000 customers as of last year.
The company discussed an investment with several potential partners, including Microsoft (MSFT) - Get Report and venture-capital firms including New Enterprise Associates, The Wall Street
Journal reported at the time. Those talks have ended.
Walmart's tech incubator, known as Store No. 8, launched Jetblack in 2018. Jetblack Chief Executive Jenny Fleiss left in October and was succeeded by Nate Faust, Walmart's senior vice president of e-commerce logistics. He had previously worked for Jet.com, the e-commerce startup Walmart bought in 2016 for $3.3 billion.
Walmart was using Jetblack's human agents to train an artificial-intelligence system that would at some point power an automated personal-shopping service, Dow Jones said.
Jetblack members pay $600 a year to order anything except fresh food by text message, the news service reported. At a Jetblack office, human agents field customer requests, and couriers fetch the items for hand delivery, usually the same day.
Last month Walmart closed the Omaha headquarters of Hayneedle, an online furniture site it received when it bought Jet.com. The company said it would integrate Hayneedle into the broader Walmart but keep the website open.
Walmart did not immediately respond to a request for comment. Its shares at last check were up 1.1% to $117.14.