Provided are a computer program product, system, and method for generating a code alphabet for use by a deployed program to determine codewords for words. A first code alphabet is generated having a first number of symbols that provide variable length codings of the words. The symbols in the first code alphabet are merged into a second number of groups of the symbols in the first code alphabet, where the second number is less than the first number. A second code alphabet is generated having the second number of symbols, wherein a second average codeword length of the codewords produced using the symbols in the second code alphabet is smaller than the codeword length (b) of the words, and wherein the second code alphabet comprises the code alphabet used by the deployed program.