It’s the heat. Wash your wool at the lowest temperature (20°c or no heat) and it’ll be fine.

In this regard, hand wash makes no difference. If you hand wash it in warm water it’ll also shrink. The reason why hand wash is recommended is to avoid tearing of finer wool fabrics. Wet wool tears easily.

Machine drying will also shrink it, because of the heat and the risk of tearing is also a problem there. Better to hang dry.

If you have already shrunken your sweaters, you can use a steamer or iron with steam functions or a regular iron and a wet rag. When the wool is hot and damp, you can reshape it. Be careful not just to stretch it wildly in all directions, because that’ll likely just make it a funky shape. It’s usually lengthwise that needs the most stretching because it shrinks proportional to the individual pieces of fabric.

You should always stretch fine wool after washing before hang drying. Otherwise it will shrink.

Tl:dr; wash without heat, stretch it while hang drying.

Basically, heat.

Just gentle cold wash and hang to dry (no dryer). If it still shrinks then it’s not a practical garment for you.

Most of the time clothes shrink after being on high settings on the dryer. Check out the clothing tag and see if they are low tumble on delicate

Both washer and dryer can cause shrinkage, but the dryer will cause more. Also natural fabrics will shrink more (by far) than polyesters. To your comment “I’m not gonna handwash. That’s just too much.” Well no one can blame you for that. But it’s still true that the gentler you wash your clothes, the less shrinkage you’ll get. It’s a balancing act, how much effort you’re willing to put in vs how long you want your clothes to last.

Personally I’m a natural fabric addict, there is very little non-natural fabric in my wardrobe. And I also do hardly any hand washing, but not zero. I often use a gentle cycle on my wash machine (top loader, sadly). Any non hand-wash garments that I still want to protect go in a garment bag on the gentle cycle, and do NOT go into the dryer. The bulk of my wardrobe gets dried but on low heat, and pulled before it’s quite all the way dry, because a lot of shrinkage happens as the garment goes from barely dry to fully dry. In particular my knits get the low temp dryer, and also any clothes which I consider semi-delicate, particularly well loved or barely big enough.

The combination of heat and agitation are needed to shrink fabric (especially wool). Heat makes the normally kinky, twisty, grippy fibers more flexible and looser. Agitation allows the loose fibers to reach other fibers farther away and grab onto them as they cool, pulling them closer, thus shrinking the fabric.

Heat and very careful stretching can somewhat restore the original size, but restoring the shape is harder.