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In this video, the presenter demonstrates how to reduce the size of an Excel file without deleting any data. They emphasize the importance of saving a copy before attempting to reduce the file size. The first step involves compressing picture sizes in Excel by selecting the picture, going to picture format, and choosing to compress under adjust. Different options are available for compressing the picture format. An alternative method is also mentioned where images can be automatically compressed by going to file, selecting more, then options, and finally advanced. Under image size and quality, editing data can be discarded and image file compression can be adjusted to reduce file size.