Hi John, and welcome.

Shrinking files can indeed create fragmented indexes. I'd only recommend it if you're deleting a load of data, AND you know the newly shrunken database files won't just grow back into the reclaimed space. This does sound something like your situation.

If you do shrink the files, carry out index rebuild/reorganise as appropriate afterwards.

Also, don't shrink the files to their minimum possible size, the index rebuild/reorg process does require some empty 'working space' within the data file.

If you delete the data but don't shrink the files, SQL Server will use the empty space in the files before growing them any further.

Note, if it's transaction log files rather than data files that are taking up the space, you can shrink these freely. Just pick a sensible size so you're not constantly growing then shrinking them - you may need to monitor this to find the right sizes.

Cheers

Gaz