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In this video, the tutorial shows how to reduce the excel file size without deleting data. It is important to save a copy of the excel file before attempting this. The first step is to compress picture size in excel by selecting the picture, going to picture format, selecting compress under adjust, and choosing a compression option. An alternative method is to go to file, click on more, click on options, click on advanced, and adjust image size and quality by selecting discard editing data and not compressing image file. This ensures that pictures are always compressed without manual intervention.