If you don't want to see them at all, you can hide them. Or if you want to see them some of the time, you can quickly toggle them via the command palette. To make the tabs physically smaller, you'll have to edit the theme file, which is not as big a deal as it may seem. The Default.sublime-theme file controls almost every aspect of ST2's appearance.
- To shrink the tabs' size, go to Preferences > Browse Packages.
- Then go to "Theme - Default / Default.sublime-theme."
- Then find: "class": "tabset_control"
- There will be a setting called "tab_height" (The default is set to 35)
- Change tab_height to whatever you want.
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