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In this tutorial, Simon explains how to reduce the size of Excel files as the data and complexity increase, causing the file size to also increase. Large files with huge amounts of data make it slow and difficult to share. To reduce the size, one method is to save the file as a binary spreadsheet by navigating to File, Save As, entering the file name and location, and selecting the Excel binary workbook option. This will help optimize the file size for better performance and ease of sharing.