Allen & Overy (A&O) has entered into a £6.8m contract with IT service provider SAVVIS for the management of its core data centre, in a move that will affect at least 12 IT jobs at the firm.

The deal sees A&O extend the range of an existing £5.5m outsourcing contract signed in January 2006, under which it has used SAVVIS' data centre to store its servers and storage networks.

The leap to outsourcing the management of the network is significant and will see SAVVIS take on the basic maintenance of the IT infrastructure supporting A&O's website, intranet and document management systems.

A&O's in-house IT department led by new head Jason Haines will, however, maintain overall responsibility for running the infrastructure.

The contract is expected to see A&O shed a number of IT jobs. The City giant is currently in the final stages of consultation with affected employees, with the aim to provide them with alternative employment where possible.

Savings achieved by the firm's recent IT initiatives – including moving to a near paperless office – have been highlighted internally as having contributed to its 31% increase in profits in the last financial year. However, A&O has indicated that this latest move is aimed at improving the reliability and disaster recovery of the data centre.

The move follows Eversheds' decision last autumn to outsource the bulk of its IT function – including its helpdesk network, infrastructure teams and IT training specialists – to IT provider Computacenter in a move that involved the transfer of 79 staff.