System Data using 781.33 GB of 1 TB, how can I reduce this file?

alarmingfriend wrote:

My 1 TB Hard Drive has 781.33 GB being used, I'm trying to figure out how to reduce this. My system is running slow. I have transferred everything to the Cloud so very little is on my local hard drive.

I don't want to blow up my MacBook and start from scratch.

https://discussions.apple.com/content/attachment/3d462727-7e7a-4c98-bd6e-fc4ddc712b90

iCloud is a conduit to have files in iCloud so you can access the same files from other Apple devices you own and when using the same Apple ID account.

iCloud was not and is not designed to be like and External Drive where you can move files Off the Computer ignorer to make space on the Internal Drive

There are some Third Party Cloud Based Service available for that Specific Purpose

There is a category in above image " Other Users & Shared " using 121.74 GB of space

Is there more than one User Account on this computer ?

Per chance, have you deleted a User Account but kept the Deleted user account " Home Folder " ?

Have you Turn On Optimize Storage

The final word from Apple on Managing the " System Data “ Category

System Data: Contains files that don’t fall into the categories listed here. This category primarily includes files and data used by the system, such as log files, caches, VM files, and other runtime system resources. Also included are temporary files, fonts, app support files, and plug-ins. 

You can't manage the contents of this category. The contents are managed by macOS, and the category varies in size depending on the current state of your Mac.

There are areas of the Operating System which we users have control over and that is the User Account Folder ( Home Folder )

All other areas are not accessible 

That is a good start

Hope this will work out for you