No, it won't. Outlook doesn't reclaim the space. The way to make it smaller is to compact. The best way, of course, would be to initial sync a brand new profile.
Note that a lot of people have emails in their Sent Items folder (or others) where they have sent lots of huge attachments; many times these messages are no longer needed. They take up lots of space. The attachments and/or the whole message can be removed if desired. Then, on the next initial sync, your mailbox would be smaller.