What Does a Cake Shrinking After Baking Mean?
Too Hot to Handle
The most common cause of shrinking is overbaking; as a cake bakes, the flour and eggs in the batter help stiffen and firm it. If a cake bakes too much, though, these ingredients become too firm, causing the cake to contract and shrink as it cools. To avoid this problem, set the timer for five minutes before you think the cake will be done. Insert a toothpick in the cake; the cake is done if the toothpick comes out with moist crumbs on it. Touch the cake lightly with one finger; if it's done, it should spring back. Don't wait until the cake shrinks from the sides of the pan to remove it from the oven, because at this point, the cake is probably overbaked.
The Oven's the Problem
To prevent your cake from shrinking due to overbaking, preheat the oven for at least 10 to 15 minutes. Set the cake in the middle of the oven on the center rack and don't overcrowd the oven, which can cause uneven baking. Use an oven thermometer to test the oven temperature gauge, which can be off by as much as 50 to 100 degrees. Reduce the oven temperature and baking time by 25 percent if you're using a convection oven. Convection ovens work more efficiently, so it's easy to overbake a cake.
The Bakeware
You set the timer according to the baking directions and checked it carefully, yet your cake still seems overbaked; the problem might be the bakeware. An oven temperature of 350 degrees Fahrenheit is a good choice for most cakes, but reduce the temperature to 325 F for tube cakes. Dark, non-stick bakeware and glassware also bake cakes more quickly, so reduce the temperature by 25 degrees if you use these kinds of dishes.
Pudding in the Mix
Using a dry pudding mix is another cause of cake shrinkage. Mixes with pudding as an ingredient make moist cakes, but the cakes may also shrink as they cool, says Anne Byrn, author of "The Cake Mix Doctor." For a cake that's firm and nicely shaped, skip the pudding-mix type cake. Check the label on your commercial cake mix to ensure the cake mix doesn't contain pudding. If you're making a homemade cake, don't add pudding mix to it.