Yes, REDUCTION is a Scrabble word!

Letter values in Scrabble US: R 1, E 1, D 2, U 1, C 3, T 1, I 1, O 1, N 1.

Is it a valid word?

REDUCTION is a valid word in the official Scrabble dictionary (US), the UK Scrabble Dictionary and Words with Friends (ENABLE).

the act of decreasing or reducing something
any process in which electrons are added to an atom or ion (as by removing oxygen or adding hydrogen); always occurs accompanied by oxidation of the reducing agent
the act of reducing complexity

Also: step-down.