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In this video tutorial, the presenter explains how to reduce the file size of an Excel file without deleting any data. The first step is to save a copy of the file before making any changes. The current file size is shown as 1232 KB. To reduce the file size, the presenter demonstrates how to compress the picture size in Excel. This can be done by selecting the picture, going to picture format, and choosing "compress" under the "adjust" option. There are different compression options available depending on the desired result, such as printing. Additionally, the presenter mentions an alternative method to always have compressed pictures without manual compression. This involves going to the "file" tab, selecting "more," then "options," and finally, "advanced." In the "image size and quality" section, ensure that "discard editing data" is selected and avoid compressing the image file. The presenter suggests reducing the PPI to make the picture smaller without affecting its quality.