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How to remove Deleted Users in Office 365  - Step by step with screenshots 

After deleting a user in Office 365, you will see the user will be in Deleted Users folder. You can't remove it using GUI. To remove the deleted User from the Office 365 you need to run Powershell command lines.

1. Connect to Office 365 by following this page: How to connect Office 365 in Windows Azure AD PwerShell

2. Then run this command: Get-MsolUser -ReturnDeletedUsers | Remove-MsolUser -RemoveFromRecycleBin –Force.

3. Refresh the Deleted Users in Office 365.

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