The overwork thing has to be culture. I'm sure they think they're cost minimizing, but I doubt adding the additional labor costs more than the additional time of the current staff doing it all alone and being stressed out and so on. The "stressed out and so on" adds up to negatives that your company will pay out.
Remember that managers too respond to incentives. People working 9-5 are probably more productive than those doing 12 hour days, but which is more likely to keep the VC money flowing?
It definitely factors into employee turnover rates. That is probably also where employees hurt themselves. People don't like looking for work and for good reason.
