The fire began in a storage area, a police spokesman said. The cause was not reported.
The workshop, operated by the German non-profit charity Caritas, employs about 120 people in the municipality of Titisee-Neustadt in the Black Forest area of the country, the German news agency DAPD reported. It said about 50 people were rescued from the burning, smoke-filled building.
A spokesman for the Baden-Wurttemberg state government said Prime Minister Winfried Kretschmann and Interior Minister Reinhold Gall would travel to the scene of the fire.