I was watching Tabletop titans and this question came up at 49:45 ish in this video

https://www.youtube.com/live/0r7Z50Xu3Gg?feature=share

Bridger said it DOES in fact reduce dev wounds damage and he said "All will be clear soon" because they have the full rules including special rules/interactions.

RAW, I would assume it doesn't do this because DW happens at the wound step and damage reduction at the allocate wounds step. But he clearly said it does.

Edit:
Hey what do you know, I was right, maybe instead of being a dick to TTT and downvoting me, check yourself.
Modifying a Damage Characteristic and

Devastating Wounds

Some rules modify the Damage characteristic of an attack that has

the [DEVASTATING WOUNDS] ability.

■ When a rule modifies an attack’s Damage characteristic, if that

attacks scores a Critical Wound, the Damage characteristic is