Updated December 5, 2024
Waste not, want not.
These wise words are especially important when it comes to business. Tracking and eliminating wasteful spending is one of the key components to a profitable bottom line.
If you’re using Microsoft 365 in your organization, chances are you’re wasting money on unused licenses. Given the fact that your subscription is priced per user, it’s a good idea to do a regular monthly audit to make sure each license is actually being utilized. Otherwise, you’re just throwing money away.
If you have employees that have left the company, you should either reassign those licenses to a new hire or remove them from your Microsoft 365 subscriptions.
Here’s how.
Once you delete a user’s Microsoft 365 account, it frees up the licenses. You can then assign that license to another employee or delete it altogether.
To delete a user, simply go to the Microsoft 365 Administration site, select “Users,” then “Active Users” and click on the person you want, and hit “Delete User.”
You have 30 days from the date you delete the user’s account to restore if necessary. After that, the data is permanently deleted.
There are two ways to remove licenses from Microsoft 365 using PowerShell. You can utilize either the Azure Active Directory PowerShell for Graph model or the Microsoft Azure Active Directory Module for Windows PowerShell.
Microsoft provides detailed instructions for both of these procedures here. Once again, you must be an Admin in order to perform these functions.
If you purchased your Microsoft 365 subscription through a reseller or Cloud Solution Provider (CSP), you will need to contact that vendor directly in order to add or remove a license.
In all three of these scenarios, the prorated changes to your account will be reflected in the following month’s Microsoft 365 billing statement*. It’s a good idea to record all changes in a spreadsheet as you are going through the removal process so you can easily compare your activity against your future billing statement.
*If you have a Microsoft 365 Enterprise Agreement (EA) then you need to wait until your EA true up or renewal to renegotiate your licensing needs.
For best practices and step-by-step guides to keep your M365 licenses under control, read Managing Microsoft 365 Licenses: Planning, Implementing and Streamlining.
Learn how to manage guest users in Microsoft 365 in Microsoft 365 Guest User Governance and Best Sharing Practices to Protect Your Privacy.
Or, see how you can automate user creation and removal with CoreView.
