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In this tutorial, Simon instructs viewers on how to decrease the size of Excel files as data is added and complexity grows. Excel file sizes can range from kilobytes to megabytes, causing them to become slow and difficult to share. To reduce file size, one method is to save the file as a binary spreadsheet by navigating to File, Save As, entering a file name and location, and selecting the Excel binary workbook format. This allows for more efficient sharing and faster performance.