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In this video tutorial, the presenter demonstrates how to reduce the size of an Excel file without deleting any data. They recommend saving a copy of the file first, then show how to compress the picture size in Excel by going to picture format, selecting compress, and choosing different options to reduce the picture format. They also mention an alternative method to always have compressed pictures by going to file, options, advanced, and adjusting the image size and quality settings. This can help reduce the file size without losing image quality.