I think the article is referring mainly to (to use Army Terms) Brigadiers and Colonels in DA/MA posts in 57 embassies around the world.
Fox is looking to replace 1*/Gp Capt level DA/NA/MA/AA appointees with SO2/3 level attaches, except in "significant capitals such as Washington DC, Paris and Moscow, and embassies in the Middle East", where embassies "are likely to retain attachés of higher rank".
It remains to be seen of course how many capitals are re-branded as "significant".
Also in the Sunday Times this morning there is mention of a plan to axe more than 50 Generals, Admirals and Air Marshals. Fox: "It is inconceivable that we would cut back on junior ranks without doing the same at the top. All three services are top-heavy. There clearly will have to be changes at the top."
The article goes on to say that in the US there are 2,947 troops for every General, while in the UK the figure across the services is 392 troops for every General, Admiral or Air Marshal.