Teams is telling me I have run out of licenses, when I have 2 available

Dear @Natalie

I understand how frustrating it is to see the error "We're sorry, it looks like you've run out of licenses" even though your dashboard clearly shows 2 of 4 licenses available.

This issue typically occurs due to a temporary synchronization delay between the Microsoft 365 Admin Center subscription status and the Microsoft Entra ID (Azure AD) identity directory, or because a location restriction is blocking assignment before the SKU checkbox is selected.

Here are the steps I recommend taking to resolve this:

Step 1: Set the Usage Location First

Before assigning a license, Microsoft 365 requires a valid Usage Location. Ensure Australia (or the intended country) is saved under the user's Account tab before checking the box under Licenses and apps. If the location isn't saved, the license assignment call fails immediately with a false "out of licenses" error.

Step 2: Assign Licenses via Microsoft Entra Admin Center

If the Microsoft 365 Admin Center UI is stuck in a caching loop, assign the license directly through Entra ID:

• Go to the Microsoft admin center > Microsoft Entra admin center
• Navigate to Identity > Users > All users.
• Select the target user, click Licenses, then select Assignments.
• Choose Microsoft 365 Business Basic and click Save.

Step 3: Assign Licenses via PowerShell

If the Web UI continues to throw errors, you can bypass the admin portal cache using the Microsoft Graph PowerShell SDK:

# Connect to Microsoft Graph
Connect-MgGraph -Scopes "User.ReadWrite.All", "Directory.ReadWrite.All"
# Set Usage Location (Required before license assignment)
Update-MgUser -UserId "******@yourdomain.com" -UsageLocation "AU"
# Assign Microsoft 365 Business Basic SKU
$Sku = Get-MgSubscribedSku | Where-ObjectId -Like "*O365_BUSINESS_ESSENTIALS*"
Set-MgUserLicense -UserId "******@yourdomain.com" -AddLicenses @{SkuId = $Sku.SkuId} -RemoveLicenses @()

Please refer to this document, it includes step by step instructions.: Get-MgSubscribedSku

If the license state does not reconcile within 24 hours after trying these steps, your tenant's subscription provisioning SKU count may be locked on the backend, requiring a quick service request reset via Microsoft 365 Admin Center > Support > Help & support.

Please let me know if assigning via Entra ID or PowerShell resolves this for you.

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