How does this mean It's going to be hard? Surely if his work is already cut out for him then this means he will not have to do the cutting which would mean less work for him yes? Where does this saying come from and why is it the opposite of what it means or do I have it wrong?
This goes quite well to explaining it, IMO - yes you are right that someone cutting out makes it easier, but in the end it could mean that you have too much to do http://www.worldwidewords.org/qa/qa-wor1.htm
The tailoring reference makes sense. If a tailor was doing his own cutting as well as sewing then he is in charge of the rate at which he works. If someone else is cutting then he has to keep up, assuming cutting takes less time than sewing, which it probably would.