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In this tutorial, Simon explains how to reduce the size of Excel files as data and complexity increases. Excel files can range from a few kilobytes to several megabytes, which can slow down the program and make it difficult to share. One way to reduce file size is by saving the file as a binary spreadsheet, which can be done by navigating to File, clicking on Save As, entering a file name and location, and selecting the Excel binary workbook option from the save as pane. This will help improve the performance and manageability of Excel files.