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I play MLB with full minors and 35 round draft.
To clean my minors in the off-season I will start with an analysis from the top down. Starting with my AAA team I will promote those worthy. Then move down to AA and A. I look at both stats and potential for promotion.
Once I am done with promotions I go back through each team. I generally run with 13-14 fielders and the same for pitchers. If during the review I find there are too many players on a team I will cut the players that spent the whole season at their current level but did not produce (with some exceptions).
The biggest cuts occur at A ball because that team is being fed by two Short A teams. On a side note, I was very happy a few versions ago when the game was preloaded with two Short A teams. It used to be only one and there was no way to have all of your recent draftees playing. Adding a 2nd Short A team used to feel like cheating.
As the draft and the start of short season leagues approaches I perform the same analysis of my rookie teams. I give some thought to opening lots of spots for the new draft class. I have a personal rule of never cutting a first year draftee. I also promote or cut guys from the International Complex at this time (18 and 19 year olds are who I look most closely at) After the draft and after all my guys have signed (or told me to beat it) I go through the teams again and cut them down to size. I will let my rookie teams carry a few extra bodies if I am loaded at one position.
Other checks I also run are to check the lineups to ensure my top prospects are slotted for their best defensive attributes. For example: if I have two SS (usually way more!) on my rookie team-----one is a low end prospect but is a wizard with the glove, he will get slotted by the AI to play SS over my high end but not as defensively gifted prospect SS. In the long term it is better for me that the high end prospect develops his D at SS so I will make the required changes.
Sometimes before making mass cuts of very young players I will sort through the garbage dump that is the bottom of the Free Agent pool. Here you can compare what you are cutting to what other teams have already cut. Also, while doing this I will often find one or two guys that I end up signing and making even more cuts to my organization.
Finally, before releasing a guy who is not cutting it I check his scouting report to make sure that he doesn't have some potential as a pitcher or vice versa. If they do have reasonable potential at the other position I will switch them and let them have a season or two to see if they develop that way. It doesn't work often but I have had some successes.
Cheers
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