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The tutorial demonstrates how to reduce file size by compressing images in a PowerPoint presentation. The options include selecting a picture, clicking on the picture format tab, and choosing to compress pictures at high fidelity. Deleting cropped areas of pictures can further reduce file size. Alternatively, users can click on file, compress pictures, and select the option to compress all pictures in the file. After making the changes, the file size will decrease, even though it still displays the original size until the changes are saved.