If you mean by that an VM image that is 5TB big, than it will be only the 400GB or less with compression. But once you restore it, it will create again a 5TB disk.
Depending if the storage can thin-provision and if the VMs disks are connected with scsi or sata, you can activate the discard option on the disks and run a fstrim inside the VM. This will free all non used blocks and reduce the actual size stored. But to not run over the storage capacity, best re-create the disk with a lesser size.