It is believed that one big name will be axed within weeks with more to follow throughout the coming year.
A show insider revealed: "Everyone is worried for their future. Some heads will roll in the coming months.
"We're talking about some of the old favourites who have been on the show for many years.
"Writers and producers feel it's time to clear out some of the big names and take the soap in a new direction.
"There is a lot of talking behind the scenes about who could go. Everyone is nervous about what the future holds."
The insider said that exciting new storylines are already being written for 2009, but it is just one of those things that some of the older characters don't fit into the new plans.
"Some of them know the writing is on the wall and there will be a number of big names to go over the next 12 months," the source said.
Already this year, fans of the Irish soap have seen Seamus Moran, who played Mike Gleeson, killed off.
Meanwhile, barmaid Gina Cassidy, who is played by Deirdre Lawless, will meet her end in a dramatic New Year's Day drink driving tragedy.
It emerged recently that RTE has signed cereal giant Kellogg's for a €1m sponsorship deal with Fair City. The one-year deal kicks off in January.
Meanwhile, Big Brother winner Brian Dowling revealed earlier this month that there was an opportunity for him to go into Fair City last year and he gave it a lot of serious consideration.
However, he ended up doing a show in London instead.
"Unfortunately, you just can't be everywhere at once, much as I would like to be," he said.
However, the well known TV personality hasn't ruled out pursuing the option of following in Boyzone star Keith Duffy's footsteps and becoming a soap star down the line.
"It's definitely something I'd be interested in doing because, obviously, it's a very well known, well-respected programme in Ireland and it would be a great honour to do it," he said.
"I think I'd be pretty good if I was written into it. It's certainly something I'll be looking into again once the panto wraps in February," he said.