On Wednesday night's episode (Oct. 2) of 'The X Factor,' the competition heated up as judges Kelly Rowland, Simon Cowell, Demi Lovato and Paulina Rubio were forced to send the first group of eliminated contestants home. The night started with 40 finalists, but only 16 made it to the next round.

Members from each category (boys, girls, over 25s and groups) sang their hearts out onstage for their mentors. The judges are doing things a little bit differently this season. Simon Cowell imported the "Four Chair Challenge" from Holland.

Here are the rules: all four judges have 10 contestants remaining on the show. There will be four white chairs placed on the stage. Each contestant will sing one by one and their mentor has to decide whether they get a seat. As the competition gets stiffer and all the chairs fill up, contestants who get a "yes" from their mentor will take the place of a contestant already in a seat.

Rowland's 25 and over group was the first up. "I think everybody is going to put forth such a wonderful effort," she says.

First up, mother Victoria Carriger. Decked in a red, ruffled dress fit for prom, sings Adele's 'Make You Feel My Love.' Even though Cowelll is unimpressed and says he wouldn't put her through on that performance, Rowland gives her a seat.

Up next is Kristen Mirelle. She sings a pitchy, breathy version of Britney Spears' 'Oops I Did It Again.' And even worse, she does so wearing acid-washed jeans. "I am not sure," Rowland says about the performance, but gives her a seat anyway.

Jeff Gutt takes to the stage next and it is expected he will definitely get a seat after the huge praise he received during auditions. He sings 'Amazing Grace' and has some audience members choked up in tears. Of course he gets a seat.

There is one more seat to fill before the competition gets rough.

Rachel Potter practically butchers Beyonce's 'Irreplaceable,' but blames it on feeling under the weather. "Do I put you in a chair or do I send you home?" Rowland wonders aloud. She snags a chair, but not for long.

Loorie Moore wins Rachel's seat with her rendition of 'I'll Make Love to You.' Even though the song choice is not that great and the performance was mediocre, she gave a heartfelt speech about work to the judges and boy did they buy it. So Christine gets the boot.

The next singer, Allison Davis, gets a well-deserved "no" after singing a boring version of Kesha's 'Tick-Tock.' Jeff Brinkman, the guy with the relatively newborn daughter, ends up switching out Victoria Carriger's spot, to no one's surprise.

Santa Claus look-a-like Denny Smith gets onstage and sings 'Midnight Hour' by Wilson Pickett and even though he receives tons of support from the audience, Cowell and Rowland send him packing. We guess Santa left her coal one year.

There are only two contestants left. James Kenney and Lillie McCloud.

James sings a beautifully arranged version of 'Lean on Me' and after sensational reviews from the judges, steals Jeff's chair. Everyone is expecting Lillie McCloud to give a bomb performance.

She does deliver. She sings Luther Vandross' 'A House iI Not a Home' and kills it. Only one question: Who's seat will she steal? Lorie is sent home and Lillie replaces her.

Demi Lovato's girls battle it out next. Bree Randall gets the first seat, even though she has an incredibly weak performance. And so does Khaya Cohen, Jamie Pineda and Ashly Williams. The rest of the girls group will battle it out for these already occupied seats.

 Watch 'The X Factor' Season 3, Episode 7 (Full Episode)