The Collaborative International Dictionary of English v.0.48:

Demote \De*mote"\, v. t. [imp. & p. p. Demoted; p. pr. & vb.
   n. Demoting.] [Pref. de- + mote, as in promote; cf. L.
   demovere to remove.]
   To reduce to a lower grade or rank, as in the military, one's
   employment, or in school; to assign to a lower position.

   Syn: bump, relegate, kick downstairs, break one's rank.
        [Webster 1913 Suppl. +PJC WordNet 1.5]

WordNet (r) 3.0 (2006):

demote
    v 1: assign to a lower position; reduce in rank; "She was
         demoted because she always speaks up"; "He was broken down
         to Sergeant" [syn: demote, bump, relegate, break,
         kick downstairs] [ant: advance, elevate, kick
         upstairs, promote, raise, upgrade]

Moby Thesaurus II by Grady Ward, 1.0:

55 Moby Thesaurus words for "demote":
   abase, boot, bounce, break, bump, bust, can, cashier, debase,
   defrock, degrade, demean, dement, deplume, depose, deprive, disbar,
   discharge, disemploy, disgrade, dismiss, displace, displume,
   downgrade, drum out, expel, fire, furlough, give the ax,
   give the gate, humble, kick, kick upstairs, lay off, let go,
   let out, lower, make redundant, pension off, read out of, reduce,
   release, remove, replace, retire, sack, separate forcibly, strip,
   strip of rank, superannuate, surplus, suspend, turn off, turn out,
   unfrock