When someone leaves, their mailbox still matters. Clients keep emailing that address, and the history in it holds quotes, contracts, and the thread someone will need in six months. When you convert a mailbox to a shared mailbox, you keep all of it, the right people can read it, and in most cases you stop paying for a license.
The catch is the order. Remove the license before you convert, and Microsoft deletes the mailbox’s mail, contacts, and calendar 30 days later.
Offboarding in Microsoft 365
The order you do these steps decides whether the mailbox survives
Right orderEmail kept
- 1Block sign-inSign out sessions, reset password
- 2Convert to sharedWhile the license is still on
- 3Grant accessManager or successor
- 4Remove the licenseIf under 50 GB, no hold
- Mailbox keptReadable by the team, no license needed
Wrong orderEmail lost
- 1Remove the licenseTo free it up right away
- 2Convert option disappearsIt needs a licensed mailbox
- 3Nobody noticesThe account still looks fine
- 4Retention clock runsMail, contacts, calendar
- Day 0Mailbox deleted at day 30Unless a license goes back on
Based on Microsoft Learn: Convert a user mailbox to a shared mailbox (updated February 2026) and Remove a former employee (updated June 2026).
1. Block sign-in first
Before anything else, make sure the former employee can’t get in. In the Microsoft 365 admin center, go to Users > Active users, select the person, and choose Block sign-in. While you’re there, sign them out of all sessions and reset the password.
The password reset matters more than it looks. Converting doesn’t change it, and Microsoft notes that the old username and password keep working on the shared mailbox if you skip the reset.
2. Convert while the license is still assigned
In Users > Active users, select the person, open the Mail tab, and choose Convert to shared mailbox, then Convert.
The option only appears while the mailbox has a license. If someone already removed it, add the license back, convert, and then remove it again.
3. Give the right people access
Go to Teams & groups > Shared mailboxes, open the new shared mailbox, and add the people who need it, usually a manager or whoever took over the work. The mailbox shows up in their Outlook on its own after a short wait.
Think about who actually needs it. A departed employee’s mailbox often holds HR conversations and personal messages, and “everyone on the team” is rarely the right answer.
4. Remove the license, if you can
A shared mailbox under 50 GB doesn’t need a license. Some do:
| Situation | License the shared mailbox needs |
|---|---|
| Under 50 GB, no hold, no archive | None |
| Over 50 GB | Exchange Online Plan 2 (raises the limit to 100 GB) |
| On Litigation Hold or In-Place Hold | Exchange Online Plan 2, or Plan 1 plus Exchange Online Archiving |
| Needs an auto-expanding archive | Exchange Online Plan 1 plus Exchange Online Archiving |
Source: Microsoft Learn, Convert a user mailbox to a shared mailbox (updated February 2026).
If none of those apply, go back to Users > Active users, select the person, open Licenses and apps, uncheck the license, and save. You can reassign it to the next hire.
5. Don’t delete the user account
The old user account anchors the shared mailbox. Delete the account and the shared mailbox goes with it. Leave the account in place with sign-in blocked.
Files are a separate job
Converting the mailbox covers email, contacts, and calendar. It does nothing for the person’s OneDrive. Give their manager access to the OneDrive files before you change anything else, and move what needs to live on to a shared location like a Teams channel or SharePoint site.
Our take: offboarding goes wrong when it’s done once a year by whoever happens to be around. Write these steps into a checklist and run the same one every time someone leaves. If you’d rather not own that checklist, offboarding is part of what we handle in managed IT.