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In this video tutorial, the presenter demonstrates how to reduce the size of an Excel file without deleting any data. It is recommended to save a copy of the Excel file before attempting to reduce its size. The first step is to compress the picture size in Excel by selecting the picture, going to picture format, and then selecting compress under adjust. Different options are available for compressing the picture format, such as setting the PPI to 220 for printing. Alternatively, users can go to file, then more, options, and advanced to set image size and quality preferences to always have compressed pictures without manual intervention.