To disable a user you would use the graph API. To do this, call update on the user with the PATCH HTTP method:

PATCH https://graph.windows.net/myorganization/users/{user_id}?api-version

And include in the body:

{
    "accountEnabled": false
}

Please see this for ref: https://msdn.microsoft.com/Library/Azure/Ad/Graph/api/users-operations#UpdateUser

/ip

If you are using Windows Server AD, just click the user and disable using Active Directory User and Computers.

If you are using Azure Active Directory, click user, navigate to profile and block user sign in and access in settings.

In addition to the information provided above, The user can be either synced or In-cloud within the Azure Active Directory created natively within the Azure AD. If the user is synced. The user's attribute called account enabled is the one which defines whether the user is enabled or disabled. A disabled user is barred from logon to the Azure portal / any service federated with user's related Azure AD. On the new Azure portal the in-cloud user can be disabled as below.