How can I reduce file upload size?

Absolutely, you can simply hook into upload_size_limit and set a maximum filesize:

// Change the upload size to 1MB
add_filter( 'upload_size_limit', 'wpse_163236_change_upload_size' ); 
function wpse_163236_change_upload_size()
{
    return 1000 * 1024;
}