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In this video, the tutorial demonstrates how to reduce the file size of an Excel file without deleting any data. The first step is to compress picture sizes in Excel by selecting the picture, going to picture format, and selecting compress. There are different options to reduce the picture format. An alternative method is also provided where you go to file, click on more, click on options, then advanced, and scroll down to image size and quality. Make sure to select discard editing data and don't compress image file to reduce file size.