Convert a Terminated User to a Shared Mailbox (Microsoft 365 + Pax8)

Purpose: Use this procedure when an employee is terminated and their mailbox must remain accessible as a shared mailbox while freeing the Microsoft 365 license and updating Pax8 billing.

Prerequisites

• You must have Global Admin or Exchange Admin permissions.
• Verify whether the mailbox needs to be archived or retained for legal/compliance before converting.
• Verify mailbox size:
  • Shared mailboxes without a license are limited to 50 GB.
  • If the mailbox is over 50 GB, you must either assign a license or reduce the mailbox size before removing the license.

Step 1: Convert the User Mailbox to a Shared Mailbox

1. Go to https://admin.microsoft.com.
2. Navigate to Users > Active users.
   • Select the terminated user.
3. Open the Mail tab.
   • Click Convert to shared mailbox.
4. Confirm the conversion and wait for completion.

Step 2: Assign Access to the Shared Mailbox

In the Microsoft 365 admin center, go to:

1. Teams & groups > Shared mailboxes
   • Select the newly created shared mailbox.
2. Under Members, click Edit.
   • Add the users who require access.
3. Confirm the users have the correct permissions:
   • Full Access (required)
   • Send As or Send on Behalf (as needed)

Step 3: Block Sign-In for the Shared Mailbox (Security Requirement)

1. Go to Users > Active users.
   • Select the shared mailbox account.
2. Click Block sign-in.
3. Enable Block this user from signing in.
4. Click Save.

This prevents direct login using the former employee’s credentials.

Step 4: Remove the Microsoft 365 License from the User

1. Go to Users > Active users.
   • Select the shared mailbox user.
2. Click Licenses and Apps.
   • Uncheck all Microsoft 365 / Exchange-related licenses.
3. Click Save changes.

This returns the license to the available license pool in Microsoft 365.

FINAL STEP: Update License Count in Pax8 (If used)

This step ensures the client is no longer billed for the terminated user’s license.

1. Log in to the Pax8 Partner Portal.
2. Search for and open the Client Account.
3. Navigate to Catalog or Subscriptions.
4. Locate the corresponding Microsoft 365 license (Business Standard, Business Premium, E3, etc.).
5. Click Modify / Edit Quantity.
6. Subtract 1 license for each terminated user.
   • Include the corresponding ticket number, or with the terminated user’s name and how the request for the terminated user, and came for billing purposes, and sign the note with your initials.
   • Example: If the client had 15 licenses and there was 1 termination, update the count to 14.
7. Save and confirm the change.

Final Verification Checklist

• Mailbox successfully converted to Shared Mailbox
• Users assigned proper access
• Sign-in blocked for the shared mailbox
• Microsoft 365 license removed from the account
• Pax8 license count reduced with proper notes
• Billing and access are now accurate

Common Mistakes to Avoid

• Forgetting to update Pax8 after removing the Microsoft 365 license
• Removing the license while the mailbox is still over 50 GB
• Not blocking sign-in on the shared mailbox
• Forgetting to assign access to required users