Elon Musk said Twitter Inc is now on track to be “roughly cash flow break-even” next year, as the billionaire owner defended his deep cost-cutting measures at the social media platform.

Twitter was previously tracking toward a “negative cash flow situation of $3 billion per year” before the cost cuts, Musk said on Wednesday while speaking in a Twitter Spaces audio chat.

Since taking over Twitter on Oct. 27, Musk has laid off 50% of the company’s employees and demanded remaining staff commit to long hours and a “hardcore” culture, prompting more employee departures. The controversial moves have rattled advertisers, who contribute 90% of Twitter’s revenue.

“We have an emergency fire drill on our hands,” Musk said. “That’s the reason for my actions.”

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Musk said Twitter was previously on track to spend $5 billion next year. With $12.5 billion in debt due to the acquisition, Twitter was facing a net cash outflow of $6.5 billion with revenue of about $3 billion next year. That amounted to negative cash flow of $3 billion, Musk said.

During the Spaces session, Musk said his “number one priority” was to grow subscriber revenue so it becomes a meaningful part of Twitter’s business, at a time when companies are cutting their advertising budgets in a weak economy.

Twitter currently has a little over 2,000 employees, Musk added.