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In this video tutorial, the presenter demonstrates how to reduce the file size of an Excel document without deleting any data. The initial file size is shown to be 1232 kb and a copy of the file is saved before starting the process. The first step involves compressing picture sizes by selecting the picture, going to picture format, then compressing under adjust. Different compression options are available, such as setting the picture format to 220 ppi for printing. An alternative method is also explained, where the user can go to file, click on more, then options, and finally advanced to access image size and quality settings. By selecting discard editing data and not compressing the image file, the user can reduce the file size further.