Sounds like you had terrible advice. Everyone worried about grades and testing, and not about maturity and social skills and so on.
Stop worrying about grades! He's 8! Who cares about his B+ or his A? Way too much pressure on a young child.
Reading skills pick up at different ages, and they pick up if you just read to your child every night before bed, after school, etc. - and let them "help" read to you too! (You do a page, they do a page.)
I wouldn't do a tutor for an 8 year old. Just shut off the computer and turn off the TV, but not making it about punishment or "you have to work on reading." Your children should see you reading, and want to join in. Board games that require reading are great too. So are things like reading a take-out menu, a cookbook (and cooking helps with math skills), a TV schedule, or the descriptive exhibit labels in a museum.
I don't understand why an 8 year old should be in a class with 6 year olds, and I don't know what the process was to make this decision, especially on only the second day of school. Get with the school psychologist and the literacy specialist (if there is one), and work out a plan.