For reasons that aren’t clear to me, Parallels allows the disk images to grow beyond their needed size. You can compress these “soft disks” and save gigabytes of space. If you are running a spindle disk then this will take a long time while an SSD will take a few seconds.
The Parallels guest OS (usually Windows) will need to be shutdown before you can start so this is a safe operation.
Note that these volumes will expand again when you use them so this is only a temporary saving. If, like me, you have Windows systems that are not used often then it might be more useful to you.