John and Edward Grimes, 18, were signed to Sony after surviving several weeks on the X Factor, despite being ridiculed for their performances.
The record deal was announced in January with the teenagers saying they were delighted to be ''like our idols... living our dream''.
But their first song, Under Pressure, a duet with Vanilla Ice, was beaten to number one last month by US band Owl City and dropped out of the top 10 a week later.
Jedward failed to top the charts despite benefiting from huge exposure performing the track with the 90s rapper at the National Television Awards.
Louis Walsh, who decided to manage Jedward after they were voted out of the X-Factor, confirmed they had been dropped by Sony and said he is talking to other labels.
Read more about Is Jedward's "15 minutes of fame" finally over...