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From either the Project or Event Users, click the checkbox next to the user you want to change the status of. Note, you can change more than one user's status at a time.
You're well on your way! Click Next for the next step.
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Above the users table, click the "More" button. Then click, "Deactivate". If a user is already deactivated, the user will instead have an activate button.
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All users who are deactivated will have a red lock icon next to their name. These users will not be able to log into the system, receive an email, or be added to an event.