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In this video, the tutorial demonstrates how to reduce the file size of a Microsoft Word document. Compressing the file is important for faster loading times, easier sharing, and optimizing storage space. The tutorial starts with a Word file of 11.1 MB containing text and images. To reduce the size, select and compress pictures by clicking on them, going to the picture format tab, and then clicking on the compress pictures icon. Ensure the options are set correctly in the compress pictures window, then save pictures at lower resolutions. Finally, click on file, select more, then options, and navigate to advance settings for additional compression options.