Convert to Smart Object

"Convert to Embedded Object" and "Convert to Linked Object" commands create a smart object from the currently selected layers.

If you use the "Layers" dialog, select one or more layers in the left panel and apply a converting command in the right panel (fig. 1).

If you prefer the Actions panel, select the source layers in the Layers panel and play the corresponding action (fig. 2).

On the screenshots, a smart object being created from three text and one raster layers.

Also, these commands let you convert an embedded smart object to a linked one and vise versa.

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