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In this video, the tutorial demonstrates how to reduce Excel file size without deleting data. It is advised to save a copy of the Excel file before attempting to reduce its size. The initial file size is shown as 1232 kb. The first step is to compress picture size by selecting the picture, going to picture format, and choosing compress under adjust. Various options are available to reduce the picture format, such as specifying the PPI for printing. An alternative method is to go to file, click on more, then options, and advanced, where image size and quality settings can be adjusted to automatically compress images.