picture on right is present, right? so, yes, you should start by cutting!
You need to go to the beginners section and look at the stickies about fat loss, especially the one by Gravityhomer. It will help you work out approximately how many calories you burn in a day and therefore how many cals you need per day to lose steady weight. It will give you a good idea on how much of carbs/protein and fats you need per day, what types of good foods contain this and how to create a diet plan. Then its up to you to create a plan with the foods you like
using something like fitday.com to track your food. choose a starting weightlifting plan like starting strength and start lifting heavy 3 times a week.
when you have created a rough diet plan, post it here and we can help more