It does seem odd, but I think there is a different root cause. VCs often tell companies to hire like mad. The idea is that revenue growth is more important and

It does seem odd, but I think there is a different root cause. VCs often tell companies to hire like mad. The idea is that revenue growth is more important and will catch up. Additional runway is found with more and more funding rounds. So you can happily grow at ridiculous rates and lose money for years and years all the way to IPO. This strategy stops working in a dramatic way if you cannot keep raising VC money. Suddenly, the funding round isn't coming to save you and your bank balance is draining fast. The only solution is to slash costs.