Target is reducing by 35 divisions to 120 divisions - which means demobilising roughly 20% of the men under arms - allowing them to return to industry and agriculture where labour is needed. The army are not planned to be used in an invasion of England. This order is confirmed by Hitler a week later
Halder records:
In the morning a Fuehrer directive comes in. It directs immediate initiation of measures to lay the foundations for a reduction of Ground Forces to 120 Divs., including 20 of Armour and 10 of mot. Inf. The directive is based on the assumption that with the now imminent final collapse of the enemy, the Army would have fulfilled its mission and so, while still in enemy country, could comfortably start on work to prepare the projected peacetime organisation. Air Force and Navy alone would be carrying on the war against Britain.