Without knowing the specifics of the situation I can only offer the following information:
AR 623-3 paragraph 3-40 “Change of Rater” states in part:
3-40a(2) A rated NCO is reduced to the rank of specialist or below, if minimum rating qualifications have been met. Part I, block c will contain the reduced rank and part I, block d will reflect the effective date of the reduction. Reduction to another NCO grade does not require an NCOER (see DA Pam 623–3).
So the short answer is yes, a report is required. The question becomes what type of report (Change of Rater or Relief for Cause)? This is up to the chain of command.