(Reuters) – Having covered financial stocks at big and small banks for more than two decades, David Hilder was accustomed to the ebb and flow of Wall Street job cuts and hiring sprees.

But he threw in the towel as an analyst last year after deciding customers simply will not pay what it costs to produce research in the years ahead, especially after a regulation called MiFID II upended the pricing model.

“It certainly seemed that the difficulty of being paid for research was going to increase, not decrease,” said Hilder, who is now trying to reinvent himself as an investment banker.

Many share Hilder’s grim outlook. Reuters spoke to dozens of current and former analysts who moved to independent research shops or investment firms, joined companies in industries they covered, or have launched new careers or are considering doing so, after nearly a decade of cost-cutting that is likely to accelerate under MiFID.

Major global investment banks have slashed their equity research budgets by more than half, from a peak of $8.2 billion in 2008 to $3.4 billion in 2017, according to Frost Consulting. The top 10 banks are expected to cut those budgets by another 30 percent in the near term, due largely to MiFID, McKinsey projects.

The rule handed down by European regulators, aimed at boosting transparency on costs, is changing the way brokerages can charge for research.

Instead of offering free reports and advice in exchange for some minimum amount of trading business, as they do now, brokerages will have to charge separately for research products and services. Although U.S. regulators are not immediately forcing firms here to comply, many banks are implementing changes globally.

Pricing models rolled out recently by Morgan Stanley (MS.N) and JPMorgan Chase & Co (JPM.N) charge thousands of dollars an hour for meetings or phone calls, and tens or even hundreds of thousands of dollars a year for basic research.

The change has put renewed pressure on senior analysts, who typically earn anywhere from $500,000 to $2 million a year, to prove their worth.

The heads of research at two Wall Street banks told Reuters they measure productivity by logging analysts’ phone calls, emails and meetings, then gauge how much customers actually value their advice with methods like tracking how many messages they open.

That helps bosses decide who should be cut and who the real stars are, industry sources said. Management teams worry that top analysts and young up-and-comers they want to keep will follow colleagues out the door.

“In some areas you are seeing money being thrown at talented analysts … to make sure they stay through the MiFID implementation period,” said Erick Davis, chief executive officer of Autonomous Research, a boutique shop not attached to a brokerage.

But ultimately, he said, “the asset management world doesn’t need 30 analysts covering a stock.”

PHONE CALL HAGGLING

The dynamic has created a morbid atmosphere in research divisions, where analysts said it feels like the “Sword of Damocles” is hanging over their heads.

On earnings calls in October, analysts asked bank chief executives how the research model would change, effectively checking in on their own jobs.

Evercore ISI analyst Glenn Schorr recently titled a research note “Writing My Obituary,” with a follow-up called “Stay of (my) Execution.”

“For the last few years, it’s been all about morgue humor like ‘flat is the new up’ and ‘no bonus, but at least you get to keep your job,’” said one former analyst who recently left a large bank but would not be quoted by name to avoid upsetting former or future employers.

“Contrast that with Silicon Valley,” he continued. “It’s not even the money; it’s the optimism that I envy. Those guys are building a brighter future and this just feels like death.”

Some have decided to launch career makeovers.

Sean McGowan spent 25 years covering consumer stocks at small and mid-size brokers before losing his job early last year amid broad cost-cutting.

After considering analyst roles at other banks, he took a job at an investor relations firm.

“The more I started to do research on the impact of MiFID and what was likely to happen to the industry, the more I realized that going back to that world would be like swimming upstream,” said McGowan. “A lot of the jobs on the sell-side are going to disappear and inevitably some of the more enjoyable parts will be peeled back. I don’t want to haggle someone about the price of a phone call.”