The longest shutdown: 36 days choking businesses
We’ve reached November and the United States government is still shut down. It is genuinely worrying for people and for businesses. The stoppage has entered day 36, becoming the longest in recent history, with public services disrupted and hundreds of thousands of employees unpaid or on temporary furlough. The U.S. economy is starting to feel it week by week. Some analysts estimate alarming losses of around $15 billion per week while government activity is frozen, a bill that does not simply disappear when Capitol Hill reaches a late deal. The cost is not just a headline number.
The Congressional Budget Office has calculated that a multi-week shutdown can subtract between $7 and $14 billion in activity that never fully returns, due to delayed paychecks, postponed federal purchases, and stalled social programs. This entire situation began on October 1, 2025 and has directly affected more than 700,000 employees, which translates into weaker consumption, greater uncertainty, and tighter payment chains for suppliers and contractors.
As you would expect, small and mid-sized companies are the most affected. The U.S. Small Business Administration has put its 7(a) and 504 programs on hold, blocking hundreds of millions of dollars in government-backed loans every business day. That leaves thousands of firms unable to secure financing precisely when they need working capital to close the year. Cash flows tighten, and the domino effect reaches payrolls, deferred purchases, and missed project milestones.
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On top of that comes a slowdown in immigration processing that affects work permits and visas, a bottleneck that complicates workforce planning and project continuity. In sectors that rely on global talent, every week of delay multiplies costs.
There are also operational impacts that rarely make headlines. Many federal contractors have extended unpaid leave and kept employees’ health plans active at their own expense, which strains cash and raises the risk of layoffs. In parallel, airports and transportation systems operate under stress when critical staff work without pay or on reduced shifts, increasing the likelihood of delays that spill into tourism and logistics. For many companies, the challenge is to protect their 2026 roadmap without burning through reserves.
This is where staff augmentation stops being just a way to minimize costs and becomes a continuity strategy. The model is straightforward. Instead of opening permanent headcount in a frozen or unpredictable market, a company embeds engineers, QAs, or data specialists from a nearshore partner into its existing product squads. They work with the client’s tools and rituals, while the client keeps ownership of the backlog and technical direction. Because Latin America shares overlapping time zones, the team can unblock issues in real time, ship on the same sprint cadence, and meet service-level agreements. That alignment, plus bilingual talent and cultural proximity, is the key advantage.
Why Latin America now. The region has consolidated itself as a prime destination for IT and digital engineering services, growing steadily and gaining share as companies rebalance global delivery after the pandemic and geopolitical shocks. Industry trackers point to significant cost efficiencies versus U.S. rates while maintaining quality and real-time collaboration. Savings grow when the partner brings mature DevOps, QA, and security practices that speed up onboarding.
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There is also a macro argument that goes beyond any single provider. The Inter-American Development Bank has estimated that nearshoring could add tens of billions of dollars per year in additional exports of goods and services for Latin America and the Caribbean in the short and medium term. This is not theoretical. You see it when U.S. companies keep launches on track by distributing work across hybrid teams, and when Latin American providers scale squads in weeks instead of quarters. In a government shutdown, every week counts and ramp time becomes a competitive edge.
We suggest companies follow a few steps, such as defining a clear intake process for the backlog, aligning coding standards and acceptance criteria, and enforcing from day one security basics like SSO, least-privilege access, and secrets management. Code and IP ownership should remain with the client, and mixed teams should operate so knowledge never gets locked on one side. Track results with engineering metrics such as lead time for changes, deployment frequency, change failure rate, and time to restore service. We also recommend establishing a cadence of quarterly reviews or scorecards so external teams adjust to changing needs without drifting out of scope.
We are confident that staff augmentation will coexist with automation rather than compete with it. Generative tools already accelerate code reviews, test generation, and documentation. Nearshore teams fluent in these tools can multiply productivity and free in-house staff for roadmap work, partner integrations, and security hardening. The right mix combines smaller cores focused on product and architecture with flexible nearshore capacity for spikes, migrations, and sustained engineering until funding or hiring normalizes.
At Square Codex we continue to support a range of North American companies. Our teams align to client hours, pursue automation from day one, and apply security measures throughout, so projects can be reactivated in days, not months. At a time when a prolonged shutdown is squeezing timelines and budgets, the goal is simple. Keep releases moving without compromising quality, protect the 2026 roadmap, and give leaders breathing room while Washington finds a way out. Latin America has the talent and the time zone to make it possible, and staff augmentation is the most direct way to turn that advantage into on-time delivery.
