[OBSOLETE stopped working with firefox 71]

1. Open about:config and set toolkit.legacyUserProfileCustomizations.stylesheets to true.
2. Open a new tab on about:support
3. Click the button next to “Profile Folder”
4. Go to the “chrome” directory at the profile folder, or create it if it doesn’t exist.
5. Create a file named “userChrome.css” (if it doesn’t exist) and open it in a text editor.
6. Copy the css code from github.com/andreicristianpetcu/UserChrome-Tweaks
   (copy of the css is at the bottom of this post)
7. Paste it into userChrome.css and save.
8. Restart Firefox

userChrome.css

/* 
* Makes tabs only 22px high rather than the default 29px
* Only works on compact mode, otherwise tab height will be normal
*/

[uidensity="compact"]:root {
  --tab-min-height: 22px !important;
  --newtab-margin: -3px 0 -3px -3px !important;
}

.tabbrowser-tab {
  max-height: var(--tab-min-height) !important;
}

.tabs-newtab-button{
  margin: var(--newtab-margin) !important;
}