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The video tutorial demonstrates a simple trick to reduce the size of an Excel file. It suggests actions like removing conditional formatting, using paste special values, clearing formatting, unhiding hidden columns, rows, and sheets, and deleting unnecessary data. By following these steps, you can reduce the size of your file. The tutorial shows creating an Excel file, inputting row data, copying cells, pasting on entire columns, and saving the file. Changing the file format from Excel workbook to Excel binary workbook can significantly reduce the file size.