Demoting my best friend?

I run a store and my best friend is (was) my istant. I demoted him today and now he his mad at me. But more at the company even though it was my choice (I did let him know that). He was messing up inventory every month and costing me on my audits. Basically wasnt doing his job even after being retrained. I thought we had an understanding that bus was bus and our friendship wouldnt get in the way. But it doesnt seem he really thinks this way. Was i wrong for doing my job and demoting him or should I have let him keep his istant title and continue to pick up after his mistakes just because we are friends and does he have a right to even be mad at me?