No matter what the culture, respect translates well. Treating people as if you believe they are competent professionals tends to make things easier. This is a problem in human psychology more than it is a cross cultural problem. All professionals should know these things happen and they are not entirely the decision of one person. If you have built a rapport, then continue doing what you are doing and just add what I am discussing below.
Part of respect though also includes being honest and dealing with problems in the open. In your case, it will be obvious people got fired or laid off. It is the elephant in the room. Some of those people may be friends of the ones remaining. Going on pretending everything is the same tends to backfire in my experience. People will be stressed and worried about their own positions.
I would suggest meeting with the remaining team as soon as possible after the other people are gone and telling them what happened and why (no personal details of course, you don't need to put people down). If you can possibly arrange to go to their country to have the meeting in person, that would likely be very helpful. It shows respect, it gives you a chance to get to know each other on a more personal level, and it makes it easier to judge reactions on both parts. (and if there are still some performance problems you need to address, it is great way to train people in how you want them to work) This would very probably be the best money you spend on the contract with returns that far outweigh the costs. The company I work for spends the money to send people both directions and it is the most critical element in making the onshore/offshore relationship work.
If you can't afford to go, then at least try to set up a meeting over Skype (or something similar) where people can see each other.
Then tell them why they were retained and ask them for help in moving forward. If you are going to be hiring replacements, ask for recommendations. Make it clear what performance level they need to reach or maintain to keep their jobs under the new conditions. Talk about how the workload needs to shift to accommodate the change. Ask them how they feel and what they need right then.
What you are trying to do with this meeting is first make them feel more secure in their own jobs and second allow them to voice their fears and thoughts and be heard (this is the respect part).
Be prepared for a loss of productivity. This is 100% normal when there is a layoff and it cannot be avoided. Frightened people simply do not produce as much.