That doesn't make any sense. If the Germans only kept some Jews alive for their labor, then why didn't they kill the Jews when the Germans no longer needed their labor and were fleeing the camps? Why were Jews found alive inside camps that didn't have production facilities nearby?Because they were working them to death. They weren't killing everyone, they were killing the old, the weak, the very sick, and the young.
The rest of them were set to work doing manual labor, because its a waste to kill them, when you can get some free work out of them. Also, the Germans didn't have good ways of quickly disposing of the bodies fast enough to keep them from piling up. Hell, many camps were running out of land to make mass graves out of. Getting rid of millions of human bodies is an extremely difficult task, which is why they had to keep their killing rate pace to how fast they could dispose of the bodies similar.
If the Germans wanted to get rid of bodies, why didn't they just dig giant pits?