Wait... have I been demoted somehow?

I work on a small team of people - about 4 of us doing the same sort of work. One of these co-workers of mine was promoted today. Now we all report to her and she continues to report to the person who used to be my boss. Am I being stupid for feeling that I have been demoted in some way? Isn't who you report to somewhat important or is it not? With our economy I think my former boss is an idiot for doing this as we just laid off 40 something people. He seems to be delegating himself out of a job - but that is a whole other topic.