What to do in Microsoft 365 when someone leaves
When a staff member leaves, their Microsoft 365 account still holds email customers reply to, OneDrive files the business needs and access that should end on their last day. Delete it too early and you can lose the lot. Leave it running and you keep paying for a licence and an open door.
Last updated
The short answer
On their last day, reset the password and select Sign out of all sessions, then block sign-in and remove company data from their phone. Convert their mailbox to a shared mailbox (or forward it) so customer email keeps arriving, and copy the OneDrive files the business needs. Only then remove the licence. Keep the account itself if it anchors a shared mailbox or forwarding.
Why order matters
Microsoft keeps a removed licence's email, contacts and calendar for 30 days and then deletes them for good. A mailbox can only be converted to a shared mailbox while it still has a licence. A OneDrive with no licence goes read-only after 60 days and is archived after 93. So lock the account first, move the email and files second, and take the licence away last.
The offboarding checklist
Lock the account
Reset the password, then select Sign out of all sessions on the Account tab. Add Block sign-in as well. Microsoft says blocking can take up to 24 hours, so the password reset is what stops them straight away.
Remove company data from devices
In the Exchange admin centre open their mailbox, select Manage mobile devices, choose Account Only Remote Wipe Device and then Block access. This removes the work account from their phone.
Keep the email
Convert the mailbox to a shared mailbox so colleagues can open the old email and calendar, or forward new mail to the person taking over. Either way, do not delete the account: it anchors the shared mailbox or forwarding.
Hand over OneDrive
In the admin centre open the user, select OneDrive, then Create link to files. Copy what the business needs into a manager's OneDrive or a shared library. Only the latest version of each file moves across.
Tidy the calendar
Cancel meetings they organised. Rooms or equipment they booked stay unavailable until those meetings are cancelled.
Stop paying
Once the email is converted and the files are safe, remove the licence and reassign it or reduce your licence count. A shared mailbox under 50 GB needs no licence.
Who this is for
- Businesses on Microsoft 365 with someone leaving this week.
- Owners still paying for accounts of people who left months ago.
- Anyone writing a simple staff exit process. On Google Workspace instead? See our Google Workspace version of this checklist.
How to run it
- Before the last day. Agree who takes over their email, files and customers, and check they have a manager set in Microsoft 365.
- On the last day. Reset the password, sign them out of all sessions, block sign-in and wipe the work account from their phone.
- In the following week. Convert the mailbox to shared or set up forwarding, copy their OneDrive files and cancel their meetings.
- Then clean up. Remove the licence, write down what was done, and decide later whether the account can be deleted.
How WaTo can help
- We run Microsoft 365 offboarding for Adelaide businesses when a staff member leaves.
- We lock the account on the day, set up the shared mailbox, move the OneDrive files to the right person and check the licence comes off your bill.
- Call us each time someone leaves, or let us handle every leaver as part of ongoing Microsoft 365 management.
Staff leaving questions
Should I delete a Microsoft 365 account when someone leaves?
Not straight away. Lock it, keep the email and copy the files first. If you convert the mailbox to a shared mailbox or forward their email, keep the account, because Microsoft needs it to anchor the mailbox or forwarding.
How do I keep a former employee's emails in Microsoft 365?
Convert their mailbox to a shared mailbox while it still has a licence. All the old email and calendar stay, colleagues can open it, and you can then remove the licence if the mailbox is under 50 GB. Reset the password too, or the old login keeps working on the shared mailbox.
Does a shared mailbox need a licence?
Not if it is under 50 GB. Over that, it needs a licence. An Exchange Online Plan 2 licence raises the limit to 100 GB.
What happens to their OneDrive if I delete the account?
By default their manager is given access and emailed. The files are kept for 30 days, with a reminder seven days before the end, and are then moved to a recycle bin. The 30 days can be changed in the SharePoint admin centre.
What if I remove the licence but keep the account?
Their email, contacts and calendar are deleted after 30 days unless you converted the mailbox to shared first. Their OneDrive becomes read-only after 60 days without a licence and is archived after 93 days, so copy the files you need before then.
Can I forward an ex-employee's email to someone else?
Yes. Open the user in the Microsoft 365 admin centre, select the Mail tab, then Manage email forwarding. Only new email is forwarded. Keep the account so the forwarding keeps working.
How quickly does Sign out of all sessions work?
Within about an hour, or sooner when they move to another page. Someone with Outlook on the web open may stay signed in until they refresh or switch apps, which is why the password reset comes first.
How WaTo can help with this
- Employee offboarding
- Microsoft 365 management
- Shared mailbox and shared inbox setup
- Microsoft 365 licence review
Guides on this topic
- What to do in Google Workspace when someone leaves
- Microsoft 365 security baseline for small businesses
- How to add an admin to your Microsoft 365 tenant
Sources & references
- Microsoft Learn: Remove a former employee, overview
- Microsoft Learn: Step 1, prevent user sign-in and block access to Microsoft 365
- Microsoft Learn: Step 3, wipe and block a former employee's mobile device
- Microsoft Learn: Step 4, forward a former employee's email or convert to a shared mailbox
- Microsoft Learn: Step 5, give another employee access to OneDrive and Outlook data
- Microsoft Learn: Convert a user mailbox to a shared mailbox
- Microsoft Learn: OneDrive retention and deletion
- Microsoft Learn: Manage unlicensed OneDrive user accounts
WaTo Consulting. Last reviewed 2026-11-13. Review every six months, or when Microsoft changes OneDrive retention, unlicensed account rules or shared mailbox limits.
Someone leaving soon?
Talk to us before their last day. We can run the whole Microsoft 365 offboarding so nothing is lost and access stops on time.
Mon to Fri, 8:30am to 5pm
