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Home > User Management > Manage Users > Downgrade License

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Downgrade License

Refer to the following steps to downgrade a license for one or multiple users:

  1. On the User management > Users page > All users tab, locate the target user and click Downgrade license.

  2. Select the desired license replacement for the target users.

  3. If license downgrade effective date is globally configured on the Tenant settings > Set license effective dates page, the effective date will appear. You can also modify the effective date by selecting a new date from the calendar.

  4. Click Downgrade license.

Note the following:

  • License assignments will be blocked if no user seats are available and the tenant is not connected to a marketplace.

  • If the tenant is connected to a marketplace, license assignment remains available even with zero available units. Selecting a license will automatically create a license request. For detailed instructions on connecting a tenant to a marketplace, refer to Marketplace.

License Downgrade Recommendations

The following table provides recommendations for license downgrades based on user activity. These recommendations are designed to help you make informed decisions when downgrading licenses for users in your organization.

Current LicenseDowngrade ToConditions
Microsoft 365 E5Microsoft 365 E3Case 1: User has a Microsoft 365 E5 license, has used Microsoft Teams within the last 30 days, and has not used Microsoft Power BI within the last 30 days. Case 2: User has a Microsoft 365 E5 license and has not used any of the following services within the last 30 days: Microsoft Power BI, Microsoft Teams, SharePoint, OneDrive, or Exchange Online.
Microsoft 365 E5SharePoint PlanUser has a Microsoft 365 E5 license, has used SharePoint within the last 30 days, and has not used OneDrive within the last 30 days.
Microsoft 365 E5OneDrive PlanUser has a Microsoft 365 E5 license, has used OneDrive within the last 30 days, and has not used SharePoint within the last 30 days.
Microsoft 365 E5Exchange PlanUser has a Microsoft 365 E5 license, has used Exchange Online within the last 30 days, and has not used SharePoint or OneDrive within the last 30 days.
Microsoft 365 E3Microsoft 365 F3No usage of desktop Office applications detected in the last 30 days, and no participation in Town Halls, webinars, or live events in the last 30 days.
Microsoft 365 F3Microsoft 365 F1No email activity (read or send) detected within the last 30 days.
Microsoft 365 F1Revoke licenseNo activity detected across any Microsoft 365 services within the last 30 days.
Azure AD Premium P2Azure AD Premium P1User has an Azure AD Premium P2 license. Elements retrieves the list of risky users from the tenant. If the current user is not on that list, the license can be downgraded.