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In this video tutorial, the presenter demonstrates how to reduce the file size of an Excel document without deleting any data. The first step is to compress picture size by selecting the picture, going to picture format, and choosing compress under adjust. There are different options to reduce the picture format, such as setting the PPI to 220 for printing. An alternative method involves going to file, then options, then advanced, and selecting image size and quality. Ensure to discard editing data and not compress image file to reduce the PPI and make the picture smaller.