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In this video tutorial, the presenter demonstrates how to reduce the size of an Excel file without deleting any data. It is advised to save a copy of the Excel file before proceeding. The first step is to compress picture size in Excel by selecting the picture, going to picture format, and selecting compress under adjust. Different options are available for compressing the picture format, such as setting the PPI for printing. An alternative method is mentioned to always have compressed pictures by going to file, clicking on more, options, and advanced, where image size and quality settings can be adjusted. This alternative method ensures that images are automatically compressed without the need for manual adjustments.