What happens to Teams and OneDrive files when someone leaves?

Anything in a Team or SharePoint site stays exactly where it is, because it belongs to the business rather than the person. Their OneDrive is a different matter: after the account is deleted it is retained for a limited period and then removed, taking with it anything they kept personally rather than filing properly.

That split is the whole reason the ownership rule matters. Business records stored in sites survive departures without anyone doing anything, which is how it should be. Business records stored in someone's OneDrive are on a clock the moment they leave, and the clock starts during precisely the period when a business is distracted by replacing them. The retention window exists to give you time, and relying on it is a plan only if someone actually uses it.

So offboarding needs three technology steps alongside the human ones, and they belong on a written checklist rather than in somebody's memory. Remove access the day they leave, not the week after, which matters most for anyone who left unhappily. Reassign ownership of any Team or site they owned, or you have created an orphan nobody can manage. And review their OneDrive before the retention period expires, moving anything the business needs into the right site.

The mailbox has its own answer worth knowing: converting it to a shared mailbox preserves the history and does not consume a licence, which is usually better than either deleting it or paying for a dormant account for a year. Do that before releasing the licence rather than after. If your business cannot currently say what happens to a departing person's files, that checklist is a half-hour to write and will save a bad afternoon: 1800 456 567.