For each powered-on virtual machine, a .vswp file is placed in the virtual machines directory on the datastore. This file is required by VMkernel to swap virtual machine memory to the disk in case of excessive overprovisioning. The swap file size can be calculated with the formula (.vswp File = Allocated Memory - Memory Reservation). As per default, the reservation is set to 0, so the .vswp file size is equal to the amount of virtual memory.
Virtual Machine with no Memory Reservation
Having the whole amount of memory from all virtual machines occupying the datastore wastes a lot of capacity. To get rid of the .vswp space, you have to reserve parts or all guest memory. If your virtual machine has 16GB and you reserve 50%, your .vswp file is only 8GB. If you reserve 100%, the file is still there but with a size of 0 bytes. The file will never disappear completely.
Please note that the swap file can only grow while the virtual machine is running. If you want to shrink the file (by increasing memory reservation) you have to power cycle the virtual machine.
Virtual Machine with full Memory Reservation - Reserve all guest memory (All locked)
Since vSphere 5.0, there is also a second vmx .vswp file whose size is about 50-150MB. This is the swap file for overhead memory reserved for the VMX process. You cannot remove that file.