BURLINGTON, Vt., Jan. 28 — After spending nearly $40 million only to face devastating defeats in Iowa and New Hampshire, Howard Dean on Wednesday named a longtime friend of Vice President Al Gore as his campaign chief, prompting the abrupt resignation of his campaign manager, Joe Trippi.

Dr. Dean said he had tapped Roy Neel, who was given the title of chief executive officer, to streamline day-to-day decision making here at his headquarters as the Democratic presidential contest enters a lightning round of multistate contests, and hoped to keep Mr. Trippi on as senior strategist.

But after a year of building the Dean juggernaut — from a staff of seven to what he has often called "the greatest grass-roots movement in the history of American politics" — Mr. Trippi refused to be sidelined, and walked out after an emotional afternoon staff meeting at the campaign headquarters here.

"You're going to see a leaner, meaner organization," Dr. Dean, the former governor of Vermont, told reporters on an 8 p.m. conference call. "We had really geared up for what we thought was going to be a front runner's campaign. It's not going to be a front runner's campaign. It's going to be a long war of attrition. What we need is decision making that's centralized."

The selection of Mr. Neel, a former telecommunications lobbyist who was an aide to Mr. Gore for nearly 20 years, both on Capitol Hill and in the White House, is a stark shift for an insurgent campaign powered largely by political neophytes whose main message is overthrowing the establishment. He is the ultimate Washington insider, not unlike like those Dr. Dean derides daily. But campaign officials say Mr. Neel was hired to bring order and professionalism to the decentralized — often woefully disorganized — troops that Mr. Trippi led more by inspiration than instruction.

The shake-up comes at a perilous time for the Dean campaign. Only weeks ago, he was riding high in the polls and had amassed far more money than any other campaign. But this week, campaign fund raisers said, the operation was scrambling to collect more money and had only between $4.5 million and $5 million on hand.

After raising $41 million in 2003 — far more than any of his Democratic rivals — Dr. Dean spent so much on television and on the ground in Iowa and New Hampshire that campaign officials said they were only confident of having enough money to compete through next week.

Dr. Dean has asked his entire staff, about 500 people, to skip their paychecks for two weeks. And already, field organizers in Wisconsin, whose primary Feb. 17 could be Dr. Dean's last stand, have been told not to expect paychecks next month.

The campaign has upended its advertising strategy. Dr. Dean, who last June was the first candidate to advertise, is now the only major candidate to be off the air right now, and his strategists said Wednesday night that they were in no hurry to return. They confirmed last weekend that they had gone dark in every state but New Hampshire so they could reassess Dr. Dean's electoral chances and then flood advertising in those states they believed he could win.

Some of Dr. Dean's prominent supporters had, indeed, complained about the effectiveness of Dr. Dean's advertising campaign, which was bigger and more expensive than those of his competitors. Figures from a rival campaign, confirmed by the independent Campaign Media Analysis Group, which tracks advertising spending, show that Dr. Dean has spent roughly $9.2 million in advertising since June, more than $2 million more than the next highest advertiser, Senator John Kerry, who spent $6.9 million, according to the figures. Nearly $6 million of Dr. Dean's campaign money went to advertisements in Iowa and New Hampshire, where Dr. Dean finished third and second respectively.

But senior officials with Dr. Dean said the advertisements had greatly helped in building Dr. Dean's popularity over the summer and fall, popularity that was slowly chipped away by attacks from rivals and with intensive scrutiny from the news media. "When you're winning, the ads are always great," said Steve McMahon, Dr. Dean's media adviser and a partner in Mr. Trippi's firm. "When you're not, they're never quite good enough."

Some of the fund raisers insisted that they were not giving up, and said the campaign has raised about $1.8 million since the Iowa caucuses and has continued to raise as much as $200,000 a day over the Internet.

The replacement of Mr. Trippi comes at a critical juncture for Dr. Dean, who spent most of last year as the dominant figure in the crowded Democratic field, but now faces an uncertain future that could leave him diminished as a kind of protest candidate. While his rivals spun out to the seven states with critical elections on Tuesday, Dr. Dean spent the day holed up here, arguing with aides about whether to make an aggressive, targeted bid for a victory in certain states or try to continue campaigning coast to coast.

The only campaigning he did was taping 26 satellite interviews for stations in 12 states that vote in the next few weeks. But leaders of the campaign asserted that the changes would revive their camdidate.

"Sometimes in politics as well as in business you need a defeat, you need a shock to the system to bring you up short and to confront with some humility your weaknesses and your problems," said Steve Grossman, the campaign's chairman.

Mr. Trippi declined interview requests, but said in a statement: "I may be out of the campaign, but I'm not out of the fight." He was described by people who have spoken to him as furious at Dr. Dean.

Beyond the naming of Mr. Neel, Tricia Enright, the campaign's communications director, said Dr. Dean was forming "a new creative team" to overhaul its television advertisements. He said the campaign was not firing its media firm, in which Mr. Trippi is a partner. Many Dean supporters have been critical of the ad campaign, particularly in Iowa. Some questioned the arrangements by which Mr. Trippi forefeited a salary as a campaign manager but collected commissions — said to be as high as 15 percent in some cases — based on advertising buys.

It was Mr. Trippi who revolutionized the use of the Internet in fund raising and political organizing. Mr. Trippi, who covets his mad scientist persona, was the reason hundreds of volunteers and interns fled their homes to move to Burlington or Des Moines or Manchester and join the campaign. He was the critical player in securing endorsements of three major unions.

It was also Mr. Trippi who suggested that Dr. Dean give a rousing, fired-up speech after his crushing third-place finish in Iowa, a speech — and screech — that may have led to his undoing in New Hampshire.

Some of the major unions and Washington politicians whose endorsements helped solidify Dr. Dean's front-runner status in November and December have grown jittery in recent weeks as they watched a campaign seemingly off its skids. Since his third-place finish in Iowa, Dr. Dean has been flooded with advice from all corners, and spent much of the week huddled with two long-serving aides from Vermont, exacerbating a standing feud between them and Mr. Trippi.

Those aides, Kate O'Connor, who travels with Dr. Dean, and Bob Rogan, a deputy campaign manager, did not return telephone calls Wednesday. But some of Dr. Dean's key supporters openly spoke in interviews about the urgency of changing course.

"We have not won the elections we hoped and kind of expected and needed to make some changes," said Representative Zoe Lofgren, a California Democrat who is friends with Mr. Trippi and was the first of 35 House members to endorse Dr. Dean. "It's a natural thing to re-tool."

Another backer of Dr. Dean, Representative Tim Ryan of Ohio, said, "I'm not sure whether it's a good move. Time will tell. I thought Trippi did an unbelievable job getting the campaign to this point."

But if such a dramatic move was necessary to signal understanding that something has gone awry, losing Mr. Trippi — who may be followed by several key aides loyal to him — is risky, since he has become a sort of cult hero to the legions of passionate Deaniacs at the core of the movement.

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