There are two different functions that will reduce image file size - image resizing and image compression.

Image resizing reduces the size of the displayed image and in the process also reduced the file size, but the image will be smaller.
Image compression reduces the file size, but does not reduce the size of the image.

There are programs that do both, like the image resizer mentioned by Terry.
MS-Paint, free with Windows, will compress images if you just open the image in MS-Paint and save it.