"Trimming a bloated ship" made me immediately think of layoffs. Then I read the article, and the tone was quite different, it looks like he's just re-focusing efforts and killing unpopular projects.
IMO, "Me Too" products only make sense if you have the valid hope to be able to offer something better than the existing products. Gmail for example was vastly better than any existing popular browser based email client. Facebook is sufficiently "good" and hard to improve further, so I'm afraid Google will have a hard time coming up with something that will convince people to make the switch.