Lossy JPEG compression is a widely used compression technique. Normally the JPEG technique uses two process quantization, which is lossy process and entropy encoding, which is considered lossless process. In this paper, a new technique has been proposed by combining the JPEG algorithm and Symbol Reduction Huffman technique for achieving more compression ratio. The symbols reduction technique reduces the number of symbols by combining together to form a new symbol. As a result of this technique the number of Huffman code to be generated also reduced. The result shows that the performance of standard JPEG method can be improved by proposed method. This hybrid approach achieves about 20% more compression ratio than the Standard JPEG.