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Reduce space used by client backups

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I just installed a 2012 Essentials box at a client location and it looks like the client backups are larger than I anticipated after a week of them being done.  I want to adjust it so that the backups are only stored for 2 days at a time, and am not worried too much about monthly backups.  If I lower the amount of retention, will I see the drive gain free space?  If not, what is the best way to regain that space?  Should I remove the backups from all the computers and re-create them with new retention settings?

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