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In this video, the tutorial demonstrates how to compress a Microsoft Word document to reduce its file size for faster loading times, easy sharing, and optimizing storage space. The Word file shown is around 11.1 MB, containing text and images. To make the file smaller, select a picture, go to the Picture Format tab, find the Adjust section, and click on the Compress Pictures icon. In the Compression Options, ensure certain settings are unchecked and checked, including using Default Resolution. Save pictures at lower resolutions by going to File, More, Options, then Advance in the left panel.