How should you remove direct E3 licenses after Entra group-based E5 assignment?
You have 2,500 users who are assigned Microsoft Office 365 Enterprise E3 licenses. The licenses are assigned to individual users. From the Groups blade in the Microsoft Entra admin center, you assign Microsoft Office 365 Enterprise E5 licenses to a group that includes all users. You need to remove the Office 365 Enterprise E3 licenses from the users by using the least amount of administrative effort. What should you use?
Community Votes
100% of anonymous learners picked answer A. Votes are pick records left by other test-takers — they are not the verified answer.
Community Insight
It tests license assignment precedence—group-based licensing does not erase existing direct assignments—and the trap is assuming the new E5 group assignment automatically removes E3.
This SC-300 question tests bulk removal of directly assigned Office 365 E3 licenses after E5 licenses are applied through Microsoft Entra group-based licensing. The page confirms that the Licenses blade is the least-effort answer (A) and explains why PowerShell and governance blades are not the intended tool.
Many learners choose Update-MgUser because it can remove a license programmatically, but scripting per-user changes across 2,500 accounts is not the least administrative effort when the Licenses blade offers a bulk direct-license removal action.
Community Discussion (3 comments)
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Expert Analysis
Why the Answer Is Correct
When E5 licenses are assigned to a group that includes all 2,500 users, Microsoft Entra group-based licensing adds E5 but does not automatically delete the existing direct E3 assignments. The Licenses blade in the Microsoft Entra admin center is designed for product-level license management and includes a direct-license removal/reprocessing action that can clear E3 for every affected user in bulk. This satisfies "least amount of administrative effort" because you act once on the Office 365 E3 product rather than editing 2,500 user objects. Microsoft's group-based licensing migration guidance specifically tells administrators to remove direct licenses after group assignments are in place so users do not retain duplicate licenses. Therefore option A is the correct operational tool.Why the Other Options Are Wrong
The Administrative units blade (B) is for scoping administrative roles and object management, not for removing product licenses from users. Identity Governance (C) covers access packages, entitlement management, and access reviews, which do not perform direct license cleanup. Update-MgUser (D) can remove a license from a user, but applying it to 2,500 users requires a script, loop, and throttling handling, making it more administrative effort than the built-in bulk Licenses blade action. Only the Licenses blade provides the product-centric "remove direct licenses" workflow intended for this migration scenario.Community Comment Notes
dzdz supports A and describes using the Licenses blade to manage assignments at a group level for multiple users. Trader6 simply calls it the "Only possible answer", reinforcing that the four options leave no better fit. bardock100 disputes A, saying "All answers are wrong open Entra and check:)" because Microsoft 365 admin center now surfaces some licensing operations; that portal observation is fair in current tenants, but the SC-300 question and its options still treat the Entra Licenses blade as the least-effort tool. No commenter provides a different valid option from the list, so the community split does not overturn A.Official Reference
Exam Strategy
In SC-300 licensing questions, favor Microsoft Entra admin center bulk features over per-user PowerShell unless the question explicitly requires automation or a cmdlet. Remember that group-based licensing creates a second assignment; direct licenses remain until removed from the product's Licenses blade.
Frequently Asked Questions
Why is Update-MgUser not the least-effort choice for removing E3 licenses?
It requires per-user scripting or a loop across 2,500 accounts, while the Licenses blade can remove direct licenses for the product in one bulk operation.
Does assigning E5 licenses to the group automatically remove the direct E3 licenses?
No. Direct assignments remain until removed, so users can temporarily hold both E3 and E5 unless you remove the E3 direct licenses.
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