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In this video tutorial, the instructor demonstrates how to reduce the size of an Excel file without deleting any data. It is recommended to save a copy of the file before attempting to make any changes. The first step is to compress the picture size in Excel by selecting the picture, going to picture format, and choosing compress under adjust. Different options are available for compressing the picture format based on the desired result. An alternative method is also provided to ensure that pictures are always compressed without manual intervention. This involves going to file, selecting more, then options, and advanced. In the image size and quality settings, choose discard editing data and don't compress image file. Adjusting the PPI can help reduce the size of the pictures.