First talk to this dev face to face to understand if they were lying to you and being disingenuous about their skill level or was it your own interview tests that just failed to detect they weren’t a senior
If they lied, fire them.
If they were honest during interview and their previous company salary, wasnt higher than your junior pay, give them an option for either demotion or resignation (with decent severance if you can afford to so that they have safety net to look for new jobs)
If you were going to hire someone junior too in the short term, then just demote this new dev to his real level.
If not, and you desperately need senior dev, make this current new dev resign or fire them.