The latest figures from HM Revenue and Customs show that 2,400 jobs held by workers living in Hartlepool were furloughed in May – 1,400 fewer than the 3,800 at the end of April.
The reduction coincided with an easing of restrictions which led to the reopening of indoor entertainment and hospitality.
The figures show that furloughed jobs in the retail sector dropped by 360, to 300. In the arts, entertainment and recreation sectors 120 fewer jobs were supported by the scheme – but 160 were still furloughed – and the number of hospitality jobs furloughed fell by 500 to 560.
But the scheme began to wind down on July 1 – with employers now having to pay 10% of the salary for furloughed staff, rising to 20% in August and September, when the support is due to end.
Nationally, the number furloughed jobs fell by 1.2 million to 2.4 million.
The reduction in Government support means firms are now required to pay 10% of furloughed staff salaries - an extra £322 this month to keep an employee earning £20,000 a year on the books.
That could be too much for some businesses, say politicians and business groups.
Labour's shadow chief secretary to the Treasury, Bridget Phillipson, MP for Houghton and Sunderland South, said: "The Government must make sure economic measures go hand in hand with public health measures and that businesses and high streets are not left out in the cold.”
British Chambers of Commerce director general Shevaun Haviland said: “The taper of Government payments into the furlough scheme should be immediately deferred until we take the final step in the road map, and further grant support should be extended to the worst affected businesses.”
The Government has spent £66bn on the furlough scheme since it started in March last year.
A spokesperson said: "We deliberately went long with our support to provide certainty to people and businesses over the summer, and that support, which is a substantial amount of funding, is continuing."