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In this video tutorial, the presenter demonstrates how to reduce the file size of an Excel document without deleting any data. The first step is to compress picture sizes by selecting the picture, going to picture format, and choosing to compress under adjust. Different options for compressing the picture format are available, such as choosing the desired PPI for printing. An alternative method mentioned is to go to file, then options, advanced, and selecting image size and quality. It is recommended to discard editing data and not compress image file to reduce PPI effectively.