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]