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In this tutorial, the speaker demonstrates how to drastically reduce the file size of an Excel file from 16.4 MB to less than 50 KB. They emphasize the importance of the file being in tabular format with rows and columns, no blank spaces in the top rows or right. The example file they use contains data on series, reference period, data value, status, and dollars. The first step is to save the CSV file as an Excel file by going to File > Save As and changing the format to Excel. This simple conversion results in a significant decrease in file size to 3.18 MB.