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In this video, the tutorial demonstrates how to reduce the size of an Excel file without deleting any data. Before starting, it is recommended to save a copy of the Excel file. The first step is to compress picture sizes by selecting the picture, going to picture format, and choosing compress under adjust. Different options are available for reducing the picture size, such as setting the PPI to 220 for printing. An alternative method is also shown, where the user can go to file, options, advanced, and select image size and quality to ensure that pictures are always compressed without manual intervention.