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The video tutorial shows a simple trick to reduce the size of an Excel file by removing conditional formatting, pasting special values on unnecessary formulas, clearing formatting, unhiding hidden columns/rows/sheets, and deleting them. The process involves inputting row data, copying cells, pasting on entire columns, and changing the file format to Excel binary workbook, ultimately reducing the file size significantly. The original file size of 5.42 MB is reduced by following these steps.