Which user gets removed when under licensed?

Question

Hey there,

I'm just trying to figure out some mechanics here.

Example: We manage a companies 365 licensing. We've purchased the licensing through a CSP provider and assigned all of them to users.

10 x Business Standard bought; 10 Business Standards assigned to 10 users.

If we cancel 2 Business Standard licenses with the CSP Provider this would mean that the users are underlicensed in the tenancy. (10 users assigned but only 8 licenses available) What happens next?

1. How long before licenses get removed from users when underlicensing happens?
2. Which user gets removed automatically? Is it the oldest assigned license, the newest assigned license or random?

Thanks

Answer 1

Dear Govert92,

Good day! Thank you for posting to Microsoft Community.

Typically, when you purchase license from Microsoft direct, you can't reduce the license number until you remove the license from the user. However, since you purchase the licenses through CSP, they can reduce the license number anytime and the system will take time to update on your side (doesn't have specific time for update). Therefore, when you cancel 2 Business Standard licenses with the CSP Provider, you may also remove those licenses from the specific users from your aside in the admin center manually to avoid any further issue. If you didn't remove the license from the user manually by going to the Microsoft 365 admin center and removing the license from the user's account before the CSP system update, you will get the notification which inform you that you are using more license than you purchase.

Regarding which user gets removed automatically, when you remove license, any user will not remove automatically. the user remains in the admin center, but you will have 30 days to assign new licenses to those users to continue to use the Microsoft 365 services and keep the data. If you do not assign new licenses within 30 days, the affected users will lose all stored data in the mailbox. You can refer to Assign or unassign licenses for users in the Microsoft 365 admin center - Microsoft 365 admin | Microsoft Learn

If you have any other question or if I've got you wrong, please feel free to let me know. I

Thank you for your precious time. Have a nice day.

Sincerely,

Libeamlak | Microsoft Community Moderator