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In this video, the tutorial shows how to reduce an Excel file size without deleting any data. It is recommended to save a copy of the file before starting this process. The first step is to compress picture sizes in Excel by selecting the picture, going to picture format, and compressing under adjust. Different options are available for compressing the picture format based on your needs, such as giving a specific PPI for printing. An alternative method is to ensure pictures are always compressed without manual intervention by going to file, then options, advanced, and adjusting image size and quality settings. Make sure to choose discard editing data and not compress image file to reduce file size.