Sources vary, but it seems that Italy had 67 Divisions in 1939 as follows;
43 x Infantry Divs, 3 x Tank, 2 Motorized, 3 x "Fast", 5 x Mountain and 11 x "Other" Divisions.... one of those must have been Airborne and some of the rest probably Static Defense.
This is outside of what was in East Africa.
In 1940, I did not get that breakdown. Instead we have 73 Divs with the following handicaps;
19 x at full strength
34 x with approximately 25% shortfalls of men and transport
20 x were at half strength in manpower and trucks, and had "significant" shortages of equipment, including artillery.
One easy move is to take those last 20 and reduce them to 10 Divs, and now you have 10 + 19 to give you 29 full-strength Divisions.
This is your Expeditionary Corps. THIS is what you can go adventuring with, the rest is strictly for defending what you already have; Italy including Sardinia and Sicily, Albania, Rhodes and Libya.
3 x Tank, 2 Motorized, 3 x "Fast", 5 x Mountain, 1 x Paratroop Div. (14 Divs total)
15 x Infantry—Reduces to 10 for Trianary Organization.
I will organize these units as follows;
1st Mech Corps; 1 x Tank, 1 x Motorized, 1 x Infantry {towards France}
2nd Mech Corps; 1 x Tank, 1 x Motorized {Africa}
3rd Mech Corps; 1 x Tank, 2 x Fast ‘Brigades’* {Africa}
4th, 5th, 6th Corps; 3x Infantry Div.s Each {North Italy (towards France) 2 x Africa,}
7th Mountain Corps; 3 x Divs {France}
Independant-
1 x Parra Div, 1 x Fast ‘Brigade’, 2 x Mountain Divs (unassigned at this point call that a Strategic Reserve)
*I am calling them "Brigades" because this is a more realistic assesment of their actual strength, regardless of what they were called then.
Now for the hard part; the …. the 34 Divisions at approx. 75%
10 x "Other" Divisions, these will be left alone and used for Home Defense; (Sicily; 2, Sardinia; 1, North Italy; 2, South Italy; 2, Albania; 1, Libya; 2)
This leaves the 24 x Infantry Divisions.
Reorganize to ; 16 Full TRIANARY Divisions and take the left-overs to create a cadre for “Reservist” Divisions in training/Home Garrisons (Rome, Taranto, Milano, Naples)
{NOTE... I would have like to do this with all the Divisions, bringing them up from 2 to 3 Regiments and making them fit for a proper European war, but there is only so much that can be done. ALSO - Italian support systems may have become used to smaller Divisions, so these Heavy Divisions will have to be used to secure, rather than lead, an offensive}
16 reduces to 12 for full Strength (75% to 100%)…. OR, Reduce to 10 at full strength and 3 x four-battalion “Brigaades” for Naval Landing units. with training and naval staff advisors. A Marine Corps, in fact.
However, since Italian Amphibious ability remains rather limited, and there is only so much that can be done in half a year, I suggest that this NOT be done.
8th, 9th, 10th, 11th Heavy Corps; 3 Divs Each,
North = Upper Italy
Central = mid-south Italy
West = Sardinia & Sicily
Africa = the last Div in this mix should be sent to reinforce East Africa.
I will call these HEAVY Divisions, and still lacking some transport. This means that they lack agility but have the best firepower.
29 + 10(other) + 12 = 41 Divisions

I know this will cause a lot of heartburn among the Fascists, a lot of those higher appointments (now defunct) were political favors, but this is what it will take to make this Army war-worthy in the world that was developing in 1940.
27 x Divisional. Artillery units are now surplus (actually 20, given shortages) so that Italian artillery Regiments will now to 1/3rd stronger or more modern and up to date. OR…. form Artillery Divisions? The later is a bad idea, unless we want to take a chance on re-creating the transport problems that our re-organization just solved. (partly)
I suggest that the entire inventory be combed-out and the oldest and most inefficient artillery be retired, and sold off to lesser powers for cash or just mothballed for emergency use.
Hopefully, this is the last of the Long-ish posts.