* StanChart, HSBC ( HSBC ) say AI will cut bank jobs

* HSBC ( HSBC ) CEO appeals to bankers not to fight AI

* StanChart tries to assuage staff concerns in memo

* Offshore workers most vulnerable, says Morgan Stanley ( MS )

analysis

By Lawrence White and Selena Li

LONDON/HONG KONG, May 20 (Reuters) - HSBC ( HSBC ) appealed to

staff not to fight AI on Wednesday, saying it would destroy jobs

while creating new ones, as banking rival Standard Chartered ( SCBFF )

sought to calm workers over comments that the technology would

replace "lower-value human capital".

The predictions from two of the world's biggest banks are

the clearest sign yet about the upheaval from a technology that

can consume and process vast swathes of data, completing tasks

previously done by people.

CEO Georges Elhedery urged HSBC ( HSBC ) staff to make sure they

were "not fighting us, not disenfranchised, not anxious,

overwhelmed, and resisting the change," pledging that AI could

make them "more productive versions of themselves".

"We all know generative AI will destroy certain jobs and

will create new jobs," Elhedery said.

Standard Chartered ( SCBFF ) said on Tuesday it would eliminate

almost 8,000 jobs as it replaced what its CEO called

"lower-value human ​capital" with technology.

Bill Winters said StanChart would cut 15% of its corporate

function roles by 2030, highlighting how staff in so-called back

office roles are particularly vulnerable.

HSBC ( HSBC ) employs more than 211,000 people, while StanChart has

roughly 83,000 employees.

Underscoring the sensitivity of the issue, Winters sought to

limit the fallout in a memo on Wednesday, saying staff were

valued and any changes would be handled with "thought and care".

Morgan Stanley ( MS ) analysts found that companies in banking,

technology and professional services had shed one in 20 staff in

the past year as a result of using AI.

Offshore workers, on which financial services firms rely to

run many of their IT services at locations including India or

Poland, and young, new workers are bearing the brunt, Morgan

Stanley's ( MS ) report said.

Banks have been reluctant to publicly discuss the scale of

job losses, although this is gradually changing.

Goldman Sachs ( GS ) told staff in October of potential job cuts

and a hiring slowdown, an internal memo seen by Reuters showed,

as the Wall Street giant embraced AI.

Wells Fargo CEO Charlie Scharf said in December it has not

reduced the number of people it employs as a result of AI, but

was "getting a lot more done" because of the technology.

AI-FUELLED JOB CULL RISKS BACKLASH

As banks become more up front about how AI could replace routine

jobs, fears are growing over the scale of disruption.

Using AI to cut jobs risks a backlash, the CEO of Norway's $2.2

trillion sovereign wealth fund said in April as staff resist

adopting it in order not to make themselves redundant.

StanChart's Winters said staff who want to retrain will be

given the chance to do so.

Academics have warned that staff could be alienated.

"One should be cautious not to lay off too many staff,

because the point in time may come sooner than you think where

the productivity potential of AI is realised, and you want these

people," said Fabian Braesemann at the Oxford Internet

Institute.

In Britain, six in 10 people think AI will eliminate more

jobs than it creates and one in five believe it will create

civil unrest, research from the Institute for Artificial

Intelligence at King's College London found.