줄이다 is a person reducing something — the transitive partner of 줄다. It covers shortening a word: 짧게 줄여서 "shorten it and say it", 네 그렇게 줄이기도 해요 "yes, we do abbreviate it that way". It also covers cutting costs (치료 비용을 크게 줄일 수 있었어요) and making something physically smaller — 작게 줄이려고 접어서 보관하는, folding it down for storage. Korean abbreviates relentlessly, so the word-shortening sense is the one you will meet most.