Severe reduction in AE (5)
I believe the answer is:
acute
'severe' is the definition.
(synonyms)
'reduction in ae' is the wordplay.
'reduction' becomes 'cut' (cut is a kind of reduction).
'in' indicates putting letters inside.
'cut' put into 'ae' is 'ACUTE'.
(Other definitions for acute that I've seen before include "Perspicacious" , "Shrewd; serious" , "Angle of less than 39 degrees" , "Grave" , "Severe; French accent" .)