Navigate to Settings located in the hamburger menu.
Click on Users & Permissions > Team Members
You can update a user to 'Removed' by clicking the red cross on the right side of the screen.
This will make the user inactive. You can always view and restore removed users by changing the status dropdown from Current to Removed:
To reactivate a removed user, click the green tick next to their name.
Note that you cannot have more than one user with the same name therefore if you are trying to create a new user that has the same name as a removed user, you may encounter an error. The best practice is to reactivate the removed user.