Generally, you don't have to reduce the user library manually since IntelliComplete will automatically reduce the user library when a given limit is reached. That limit can be set in the <General> page of the options dialog.
This menu function enables the user to manually reduce the user word library or even clear the whole user library. Click <Reduce> to reduce the library so that it only contains the specified number of words. Click <Clear All> to remove all the words in the user library.