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This video discusses file compression and file size when working with images in Photoshop, specifically focusing on the use of PSD and TIFF formats. The speaker explains their preference for TIFF files over PSD due to reduced file size, which is important when working with multiple images and layers. Saving in TIFF format can cut file size in half without sacrificing quality, allowing for more free space on your hard drive. The speaker performed tests to demonstrate the benefits of using TIFF files.