This article provides the steps on how to clear the error message "Virtual machine disks consolidation is needed" on a VM.
When the below error message is seen on the VM :
To clear the alert, match the scenario and follow steps outlined in the KB 1002310.
Note: Look for steps which can be performed via the UI only.
If none of steps from the above article help then, the best viable option would be to clone the affected VM or restore the VM from a most recent backup.
For any clarifications and issue troubleshooting, file a Support Request. For more information, see How to file a Support Request in Customer Connect (2006985)