August 19, 2021
min read
Roy Martinez
With over 16 years in Microsoft and IT infrastructure, Roy uses his SharePoint, Power Automate, and Microsoft Teams expertise to help organizations develop strategies for adoption, collaboration, automation, and governance.

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.

Remove Licenses By Deleting the User Account

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.

Remove Licenses with Microsoft 365 PowerShell

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.

Remove Licenses By Contacting Your Reseller or CSP

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.

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Created by M365 experts, for M365 experts.