The 34-year-old Canadian winger has endured a hit-and-miss season in the Elite League and has paid the price for a recent slump in results which has seen the South Yorkshire club fall behind Cardiff Devils and Belfast Giants in the title race.
Head coach Paul Thompson threatened to make changes after two defeats to Nottingham Panthers earlier this week and is currently scouring the market for a replacement for Schultz, with a couple of options already possible.
“Jesse just wasn’t bringing what I expected on a consistent level and our results through the month of December haven’t been where I think they should be,” said Thompson.
“We’ve had some bad bounces, but we’ve got to look at ourselves and I think it is time to shake the bag and just let everybody know what is expected here so we move on.
“I’m talking to a couple of players right now, but it’s very early days.”
Schultz, who arrived in Sheffield on the back of a resume that included more than 370 games in the American Hockey League, scored 19 points in 23 appearances for the Steelers, including eight goals.
He will now serve out his two-week notice and play no part in this weekend’s double-header against Manchester Storm.
“We’re going to have a look at the market and see what is out there because that is what we have to do as a club,” said Thompson after his side’s 3-2 defeat in Nottingham on Tuedsday night before calling his players in on their scheduled day off on Wednesday to air his concerns.
“We need to be better in certain areas. We have a vision for this club and where we want it to be and it doesn’t always go the way you want it to and you have to react in terms of where you think you can improve.”