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What is no longer with us?
Usually implies that someone is deceased, but may mean that the person is no longer associated with an organization. Potentially, the term could start a rumor that the individual is dead.
Customer: "Does Matt still work here?"
Worker: "No, I'm afraid he's no longer with us."
Customer: "I'm so sorry to hear that."
Worker: (optional) "He decided to quit last week, so he could go back to school."