Not a whole lot of documentation here, just slice and dice as you see fit.

In the environment that this was created in, all Office 365 users are in the group “SyncWithO365” (this is the sync group for Azure AD Connect). Most users receive an Exchange Online 1 license. The users that receive an E3 license are in O365E3License group. This script will take those two groups and issue Office 365 EO1 and E3 licenses accordingly.

#config

#tenant name (before the .onmicrosoft.com)
$strTenant = "awesomeCorp" 

#admin account on 365 to issue licenes with
$str365UserName = "[email protected]"
$str365Password = "password123"


$str365AllUsersGroup = "SyncWithO365"
$str365EnterpriseUsersGroup = "O365E3License"

##########################
# Do not edit below this #
##########################

#all users that were not in 365
$objFailedUsers = New-Object System.Collections.ArrayList($null)

#loggin function
function Go-Logit
{
    Param([string]$LogEntry)
    $strTime = get-date -f MM-dd-yyyy:HH:mm:ss
    write-host $strTime ":" $LogEntry
}

#set the license function
function Set-License365
{
    Param ([bool]$StandardLicense,
    [string]$User)

    #Get-MsolAccountSku
    #setup the SKU's
    $strEnterprise = $strTenant + ":" + "ENTERPRISEPACK"
    $strStandard = $strTenant + ":" + "EXCHANGESTANDARD"

    $blUserIsIn365 = $true
    #get the user license
    $objUserLic = Get-MsolUser -UserPrincipalName $User

    if($objUserLic -eq $null)
    {
        Go-Logit -LogEntry "$User isn't in 365"
        $objFailedUsers.Add($User)
        $blUserIsIn365 = $false
    }
    
    if($blUserIsIn365 -eq $true)
    {
         #if we dont have a license
        if($objUserLic.IsLicensed -eq $true)
        {
            Go-Logit -LogEntry "$User : License found"
            #we have a license, so now we need to check it its correct
            $blEntLicenseFound = $false #enterprise license
            $blStaLicenseFound = $false #standard license
            foreach($objLicense in $objUserLic.Licenses)
            {
                #$objLicense
                if($objLicense.AccountSkuId -eq $strEnterprise)
                {
                     Go-Logit -LogEntry "$User : Seems to be enterprise"
                    $blEntLicenseFound = $true
                }
                if($objLicense.AccountSkuId -eq $strStandard)
                {
                    Go-Logit -LogEntry "$User : Seems to be standard"
                    $blStaLicenseFound = $true
                }
            }
            #if this is a standard license user
            if($StandardLicense -eq $true)
            {
                #if a enterprise license was found, we need to replace it
                if($blEntLicenseFound -eq $true)
                {
                    Go-Logit -LogEntry "$User : Replacing enterprise with standard"
                    Set-MsolUserLicense -UserPrincipalName $User -AddLicenses $strStandard -RemoveLicenses $strEnterprise
                }
                else
                {
                    Go-Logit -LogEntry "$User : The correct license was found"
                }
            }
            #this must be a enterprise user
            else
            {
                #if a standard license was found, we need to replace it.
                if($blStaLicenseFound -eq $true)
                {
                    Go-Logit -LogEntry "$User : Replacing standard with enterprise"
                    Set-MsolUserLicense -UserPrincipalName $User -AddLicenses $strEnterprise -RemoveLicenses $strStandard
                }
                else
                {
                    Go-Logit -LogEntry "$User : The correct license was found"
                }
            }
        }
        else
        {
            #no license was found, need to add one
            Go-Logit -LogEntry "No license found"
            #if this is a standard license user
            if($StandardLicense -eq $true)
            {
                Go-Logit -LogEntry "$User : Setting a standaed license"
                Set-MsolUser -UsageLocation US -UserPrincipalName $User
                Set-MsolUserLicense -UserPrincipalName $User -AddLicenses $strStandard
            }
            #must be an enterprise
            else
            {
                Go-Logit -LogEntry "$User : Setting a enterprise license"
                Set-MsolUser -UsageLocation US -UserPrincipalName $User
                Set-MsolUserLicense -UserPrincipalName $User -AddLicenses $strEnterprise
            }
        }
    }
}

#get Exchange Online E1 users 
$obj365UsersArr = @(Get-ADGroupMember -identity $str365AllUsersGroup -Recursive | get-aduser | select -Expand UserPrincipalName)
$obj365Users = New-Object System.Collections.ArrayList(,$obj365UsersArr)

#get E3 users
$obj365e3UsersArr = @(Get-ADGroupMember -identity $str365EnterpriseUsersGroup -Recursive | get-aduser | select -Expand UserPrincipalName)
$obj365e3Users = New-Object System.Collections.ArrayList(,$obj365e3UsersArr)

#enumerate through all E3 users and remove them from the group that contains all users
#the result,  $obj365Users will only have people not in the e3 group
foreach($objE3User in $obj365e3UsersArr)
{
    $obj365Users.Remove($objE3User)
}

#create credentials to speak with office 365
$objPassword = $str365Password | ConvertTo-SecureString -asPlainText -Force
$objCredential = New-Object System.Management.Automation.PSCredential($str365UserName,$objPassword)
Import-Module MSOnline
Connect-MsolService -Credential $objCredential

Go-Logit -LogEntry "----------------------Pushing licenses for Standard users"
#standard users
foreach($objUserTemp in $obj365Users)
{
    Set-License365 -User $objUserTemp -StandardLicense $true

}

Go-Logit -LogEntry "----------------------Pushing licenses for Enterprise users"
#Enterprise users
foreach($objUserTemp in $obj365e3Users)
{
    Set-License365 -User $objUserTemp -StandardLicense $false

}

Go-Logit -LogEntry "----------------------Listing all users that were not in 365"
#log the users that were not in 365
foreach($objUserTemp in $objFailedUsers)
{
    Go-Logit -LogEntry "$objUserTemp was not found in 365, check group membership"

}