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If an employee leaves your organization, and you don't want to continue to pay for their Microsoft 365 license, you can unassign that license and then delete it from your subscription. You can reassign a license to another user if you don't want to delete it. This article describes how to remove a license from a user and delete it.
Before you remove a license, you must remove all holds for the user. For more information about holds, see Remove an In-Place Hold in Exchange Online.
If the mailbox needs to be accessed by authorized people who have been granted eDiscovery permissions for compliance or legal reasons, it must be assigned an Exchange Online Plan 2 license (or an Exchange Online Plan 1 license with an Exchange Online Archiving add-on license) so that a hold can be applied to the mailbox before it's deleted. After the user account is deleted, any Exchange Online license associated with the user account will be available to assign to a new user.
When you remove a license, that user's data is held for 30 days. You can access the data, or restore the account if need be.
After 30 days, the user's content (except for documents stored in SharePoint) is permanently deleted from Microsoft 365 and can't be recovered.
Note
You must have appropriate permissions through a role, such as License Administrator or User Administrator to perform the tasks in this article.
Remove licenses
In the Microsoft 365 admin center, go to Users > Active users. (Or go directly to the Active users page.)
Select the name of the former employee, and then select the Licenses and Apps tab.
Clear the check boxes for the licenses you want to remove, and then select Save changes.
Reduce the number of licenses
To reduce the number of licenses you're paying for until you hire another person, do the following steps:
In the Microsoft 365 admin center, go to Billing > Your products. (Or, go directly to the Your products page.)
Select the subscription from which you want to remove licenses.
On the subscription page, select Remove licenses.
In the Remove licenses pane, specify when the following information:
- When the change could take effect
- What the new total license quantity should be
Select Save.
How the deleted employee account affects their PSTN number
When you remove a user's license from your Microsoft 365 subscription, and your organization is using Public Switched Telephone Network (PSTN) connectivity, the PSTN calling number associated with the former employee is released. You can then assign it to another user. See Manage phone numbers for users.
If the user belongs to a queue group, they're no longer a viable target of the call queue agents. We recommend removing that user from any groups that are associated with the call queue.
Set up call forwarding to people in your organization
If you need to set up call forwarding for the terminated employee's phone number, the call forwarding setting under calling policies can be set up forwarding. Incoming calls can be forwarded to other users or can ring another person at the same time. For more information, see Calling policies in Microsoft Teams.