[SalesForce] How to reset an API user’s password

You can suppress creation of initial email (it's identical to unticking the checkbox "generate new password and notify user immediately" on the new user screen). Then whenever you're ready later - System.setPassword?

If this can work for you I'd like to link to my SO answer for similar thing: https://stackoverflow.com/questions/13118039/salesforce-creating-contact-and-user-by-importing-csv-file-send-notification/13137400

The problem with setPassword is that it's good for one time (upon logging in you land on the password change page similar to what happens when your password expires). That's how SF makes sure sysadmin will not know the user's final desired password. And of course you'd have to set it to something that complies with your own policies ("remember 3 last passwords" for example).

You could perform something like this in Execute Anonymous, silently changing their email after deactivating the user and then resetting the password:

// retrieve your 500 users
List<User> users = [SELECT Id, IsActive, Email FROM User WHERE FirstName = 'Derpy'];

// deactivate the users
for (User u : users) {
    u.IsActive = false;
}
update users;

// correct their email addresses
for (User u : users) {
    u.Email += '.nonsense';
}
update users;

// reactivate the users
for (User u : users) {
    u.IsActive = true;
}
update users;

// fire a password reset and send the reset email
for (User u : users) {
    System.resetPassword(u.id, true);
}

Prior to running this script, consider the repercussions of deactivating active users. SFDC Link: Tips on Deactivating Users