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In this video tutorial, the presenter demonstrates how to reduce an Excel file size without deleting data. They recommend saving a copy of the Excel file before attempting the reduction. The current file size is shown to be 1232 kb. To reduce the file size, the first step is to compress picture size in Excel by selecting the picture, going to picture format, and selecting compress under adjust. Different options are available for compressing the picture format, such as setting the ppi for printing. An alternative method is discussed to ensure that pictures are always compressed without manual intervention, by going to file, then options, then advanced, and adjusting image size and quality settings. This allows you to reduce the ppi and make images smaller without worrying about compression.