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This video tutorial demonstrates how to reduce the size of an Excel file without deleting data. It is recommended to save a copy of the original file before attempting any changes. The first step is to compress picture size by selecting the picture, going to picture format, choosing compress under adjust, and selecting the desired compression options. An alternative method to always compress pictures automatically is to go to file, click on more, options, advanced, and adjust image size and quality settings. By selecting discard editing data and not compressing image files, users can reduce the file size efficiently.