The US government shutdown due to a budget impasse between politicians could have serious ramifications for the US tech sector, including Twitter’s planned initial public offering (IPO).
The issue came to head overnight after politicians failed to agree a deal on the proposed budget for the year ahead. This means funding for many government departments has yet to be released and as a result many areas of the US, such as the Department of Energy and the Department of Transportation are effectively shut.
For major technology vendors, such as Cisco, IBM, Microsoft and Google, this could mean payments for their services will not be made, leaving any third-party contractors in the lurch too, as they may not be required or receive any payments while the shutdown continues.
Cisco urged the US government to work through the current crises for the good of the economy.
“At a time when the US economy is showing positive signs of improvement, the government shutdown has the potential to create more uncertainty for American businesses and consumers," it said in a statement sent to V3.
"We urge government leaders to find a solution to the shutdown and looming debt ceiling impasse as soon as possible, then turn their attention to enacting policies to drive investment, create jobs and improve the economy.”
V3 contacted the other above firms for any insight on how the shutdown could affect their business but had received no reply at the time of publication.
Twitter’s looming IPO could also be hit as the Securities and Exchange Commission (SEC) is one of the organisations that could be affected. However, to begin with it appears to be one of the few agencies able to continue unaffected for a short while.
"The SEC will remain open and operational in the event the federal government undergoes a lapse in appropriations on 1 October,” reads a statement on its website.
“Any changes to the SEC's operational status after 1 October will be announced on this website. The SEC's current operational plan in the event of an SEC shutdown is available here.”
For now, then, Twitter’s plans may still be processed, but if the deadlock continues it could run into difficulties. V3 contacted Twitter for any statement on the situation but had received no reply at the time of publication.
While Twitter’s plans may not be affected, many government institutions on Twitter have already gone silent since the shutdown began. The Nasa account is now unmanned while its @AsteroidWatch account is also offline.
In the event of government shutdown, we will not be posting or responding from this account. We sincerely hope to resume tweets soon.— Asteroid Watch (@AsteroidWatch) October 1, 2013
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