Unable to remove E3 user subscription using Removal Candidate

[saranyavs]

Hi team,

We are getting below error when try to remove E3 license from a test user using Removal candidate. But it was working fine with other license of Exchange online.  Please assist.

These are the SKU ID products in the above error.

Regards,

Saranya

[Tanushree Maiti]

Hi @saranyavs 

Check this SN documentation  for prerequisite  to the same function.

Prerequisites

Before initiating the automatic removal of licenses from the Microsoft 365 admin center, confirm that the following prerequisites are met:

• The following spoke is set up and plugins are installed:
  • Microsoft Entra ID Spoke
  • Software Asset Management Professional (com.snc.samp)
  • Software Asset Management - SaaS License Management (sn_sam_saas_int)
• Microsoft Entra ID is configured with the following permissions to access and manage user and group information:
  • User.Read.All
  • GroupMember.ReadWrite.All
  • LicenseAssignment.ReadWrite.All

Note: I know your requirement is manual.

Also refer:

https://www.youtube.com/watch?v=QPizzKoPQpw&t=4s

[saranyavs]

We have all the above prerequisites, and able to remove Exchange online subscription from user. Issue is only with E3 license removal.

[SAMfluencer786]

Hi @saranyavs,

Remove the user from the group manually (M365 Admin) Since the license is group-based, the reclamation should be handled at the group membership level, not the individual license level. Have your M365 Admin remove the user from grp-m365-license-e3. SAM Pro reclamation via direct license removal won't work for group-assigned licenses with multiple SKUs.

1. Microsoft Official Documentation:  Group-based licenses cannot be removed at the individual user level :Inherited group licenses can't be modified or removed directly on a user in the Microsoft admin center. This is confirmed in the Microsoft Q&A forums and directly links to the Microsoft Entra group-based licensing documentation.  https://learn.microsoft.com/en-us/answers/questions/5244185/i-am-unable-to-remove-office365-license-...

2. Microsoft Entra Group-Based Licensing Limitations (Advanced Scenarios): Licenses not already assigned through group-based licensing can be changed for an individual user. Directly assigned licenses can be removed and don't affect a user's inherited licenses. The inverse is also true — inherited (group-assigned) licenses must be managed at the group level. https://learn.microsoft.com/en-us/entra/identity/users/licensing-group-advanced

3. ServiceNow Community - Without Entra ID Spoke, reclamation requires manual action in M365

Without the Entra ID Spoke, reclamation workflows will identify candidates but require manual license removal in the M365 Admin Center. Even with the Spoke, the automation calls the Microsoft Graph API -  which still honours the group-based assignment restriction above. https://www.servicenow.com/community/sam-articles/microsoft-365-optimization-with-sam-pro-part-1/ta-...

The SAM Pro reclamation flow calls the Graph API to remove the subscription, but Microsoft's own Graph API enforces the same rule  you cannot remove a group-inherited license from the user object directly. The removal must happen via group membership.

If this helped sort things out, please mark it as Helpful and Accept it as the Solution much appreciated.

Regards,

Abby