削 has two readings. The everyday xiāo is the physical action of paring with a blade: 削皮 (to peel), 削铅笔 (to sharpen a pencil), 刀削面 (knife-shaved noodles). The literary xuē is the abstract 'reduce / strip away': 削减, 削弱, 剥削.
culture
In gaming slang 被削了 (using the xuē reading) means a character got nerfed, their abilities 'shaved down' by the developers. Every patch-note discussion uses this word.
肖 gives the sound xiāo directly, with the secondary reading xiào (resemblance). The 'small / diminished' flavour also sneaks into 削: to pare down or shave off material until something is reduced. Same phonetic in 消 (dissolve) and 销 (melt down).