To "cut down on" something means to do or have less of it. You use this to talk about things that you want to stop or slow down. For example:
Since we started cutting down on our unnecessary spending, we've been saving over $300 per week.
We've cut down on the number of customer complaints by 60% this year.
"Cut down on ___" can be used in both spoken and written English.
Another word that means the same thing as "cut down on" is "reduce":
We need to reduce spending.
But "reduce" is more formal than "cut down on".
Another similar phrase is "cut back on". It's more often used to talk about money, spending, or time:
"I'm trying to cut back on my clothes shopping."