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To reduce the file size of a 26 megabyte file, images can be compressed in two ways. The first method is to select a picture, go to the picture format tab, choose compress pictures, and select an option like high fidelity. You can also delete cropped areas of pictures and choose to compress just the selected picture or all pictures. The second method is to click file, compress pictures, and the default option will compress all pictures in the file. Despite making changes, the file size will still show as 26 megabytes until you save the changes.