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In this video, the tutorial discusses how to reduce Excel file size without deleting any data by compressing picture sizes. It is recommended to save a copy of the file before proceeding with the compression. The first step involves selecting the picture, going to picture format, and choosing compress under adjust to reduce the picture format. Different options are available for compression, such as 220 ppi for printing. An alternative method is also mentioned, where users can go to file, click on options, then advanced, and scroll down to image size and quality to ensure that pictures are always compressed without manual intervention.