Apparently the company had been in talks to get rid of their craft department for a couple years now. This at least dates back to 2008--at that time I found out through a purse group I belonged to on Yahoo that craft departments were disappearing at the other members' stores little by little. At that time, Walmart was saying they were getting rid of the craft department so they could replace it with a "Celebrations" department, which was supposed to be an expanded selection of party garbage (Ooops, I mean GOODS). I haven't really seen any of these departments in the stores I go to, seems like nowadays, they're just chucking the craft department to just get rid of it instead of replacing it with something else. The Super Center in Clarence, NY spontaneously kicked out its craft department just to leave an empty corner of the store where the staff just piles random boxes to be placed on shelves.
I talk to the ladies at my Walmart's craft department pretty often. The company is now moving towards having a small craft department with precut fabrics. Precut fabrics may not neccessarily be such a bad thing (especially if they keep the $5 bolt test program like they have now), but the way I've seen some of the precut stuff they have already there (again, not including the $5 bolts), we'll be paying a heck of a lot more than what we pay now, for the same fabric. One precut yard of some unlicensed graphic fabric ran for around $9. At that point, you're better off just going to either JoAnn's or even your local higher markup fabric store.
I'm tempted to go on a rant about how Walmart is becoming more and more useless of a store as the years go on, but I won't do this, though this is true in my area. I will say, though, that keeping the craft department would fit real good into their "Save Money, Live Better" motto they're promoting. What better way to save money than to make your own stuff?