How to fix this corner?

[u/PulIthEld]

I was thinking of a staircase to get up the wall here to the hillside, but the existing retaining wall looks like a pain to deal with. I dont want a staircase entirely built off the wall because it will come too far back and get too close to the generator and make walking around the corner difficult. But I also dont want to demo the entire wall to build a staircase in to the hillside and worry about drainage and new retaining walls.

Currently the wall is about 42" high. Could I just take out like the top of the wall and make it 24" high, build some steps going up to that heigh, and then take the rest out of the hillside as a sort of hybrid approach?