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In this tutorial, the speaker demonstrates how to reduce the size of an Excel file without using any external software. By utilizing a built-in feature in Microsoft Excel, the file size can be reduced by up to 70%. The process involves opening the file, saving it as an Excel binary workbook, and choosing an output location. By following these steps, the original 20.5 MB file was successfully reduced to 2.38 MB, showcasing a significant decrease in size.