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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 recommended to save a copy of the file before attempting any changes. The initial file size is shown as 1232 kb. To reduce the size, the first step is to compress the picture size by selecting the picture, going to picture format, and choosing compress under adjust. Different options are available for compression, such as reducing the picture format to 220 ppi for best results. An alternative method is also provided to ensure that pictures are always compressed by going to file, then options, advanced, and selecting image size and quality options. It is suggested to discard editing data and not compress the image file to reduce the size further.