Okay, I finally worked it out.
APIusername is set to their email address as we do not have any API keys set up.
The update also needs the useremail field, so the email address is actually in there twice.

Sorry, posted this to soon! It did not like the email address as the APIUserNameSo, what do I need to put into this field? And how do I get it in a bulk download?

In order to get the APIUserName you have to do the download of the users with the permissions.
Even though it says this download cannot be used to do a bulk update.

Hello ​@JAG 

Thank you for reaching out, and welcome to the Docusign Community! We appreciate your question and assure you that we are fully committed to providing you with the best service possible. 
I understand that you’re trying to bulk update a large number of users to Closed status and need clarification on what to enter in the APIUserName field. Could you confirm whether you’re performing this action at the “account level” or the “organization level”? Please note that bulk closing users can only be done at the organization level. When you perform a bulk export of users at the organization level, the export file will include multiple columns, one of which is APIUserName. This field represents the user’s unique UserID, which you must use for the bulk update.

Go to Organization Admin Tab > Bulk Action > Beside Users click the three dots to see options for Close users > Download Close Template > Upload Close Template with users' details you want to close, then Submit. 

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Sincerely,

Ma. Cassandra | Docusign Community Moderator
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Thank you, that worked for me

Hello ​@JAG 

That’s great to hear—glad things are working now. If anything else comes up or you hit another roadblock, don’t hesitate to reach out here in the Community.

Wishing you a smooth rest of your day!
 

Sincerely,

Ma. Cassandra | Docusign Community Moderator
If this helped, feel free to Like👍and click "Best Answer"