Not trying to be a dick by just posting a link and not offering direct advice, but this article is what you should be doing as far as internationalization. Google supports the way that you are currently doing it with subdomains, as well as recommending it:
https://support.google.com/webmaster...r/182192?hl=en
The problem that I see though, is that if your different landing pages (subdomains) are in the appropriate languages, Google will detect that and will not consider it to be duplicate content and thus not penalize you for it. I think it is likely that the problem isn't with your site and the latest Google update, but with other sites and the latest Google update - meaning that other sites have benefited from the update rather than your's suffering from it.
If that is the case, then you won't be able to make structural changes to address the decline, you will have to improve and/or update your site.