How to resolve the error message "Unzipped size must be smaller than 262144000" after migrating to serverless webpack

Question

I'm getting a size limit error for my lambda after migrating to serverless webpack! I've migrated to webpack to resolve the issue so something's not right if I'm still getting the same error, see below for the error message.

Many thanks!!

Error message

An error occurred: MainLambdaFunction - Resource handler returned message: "Unzipped size must be smaller than 262144000 bytes (Service: Lambda, Status Code: 400, Request ID: ..., Extended Request ID: null)" (RequestToken: ..., HandlerErrorCode: InvalidRequest).

serverless.yml config

service: my-service-name

frameworkVersion: ">=1.1.0 <3.0.0"

plugins:
  - serverless-webpack

custom:
  webpack:
    includeModules: true
    packager: 'yarn'

package:
  exclude:
     - ./**
     - "!node_modules/**"
  include:
    - js/**
    - package.json

provider:
  name: aws
  runtime: nodejs12.x
  stage: staging
  region: eu-west-1
  memorySize: 1024
  timeout: 30

The lambda is using node, so my package.json is included below for reference.

package.json file

"dependencies": {
    "aws-sdk": "2.77.0",
    "currency-formatter": "^1.2.1",
    "dot": "^1.1.2",
    "lodash": "4.17.4",
    "moment-timezone": "0.5.33",
    "pg-native": "^2.2.0",
    "source-map-support": "^0.4.2",
    "winston": "3.2.1",
    "winston-cloudwatch": "^2.0.6"
  },
  "devDependencies": {
    "@types/chai": "^3.4.34",
    "@types/currency-formatter": "^1.0.1",
    "@types/dot": "^1.1.2",
    "@types/elasticsearch": "^5.0.19",
    "@types/lodash": "4.14.71",
    "@types/moment-timezone": "^0.2.34",
    "@types/node": "10.17.39",
    "@types/source-map-support": "^0.2.28",
    "chokidar": "^2.0.3",
    "chokidar-cli": "^1.2.0",
    "concurrently": "^3.5.1",
    "semver": "^5.3.0",
    "serverless": "^1.67.3",
    "serverless-webpack": "^5.6.0",
    "ts-loader": "^9.2.2",
    "tslint": "5.16.0",
    "tslint-eslint-rules": "5.4.0",
    "typescript": "^3.3.1",
    "webpack": "^5.65.0",
    "webpack-node-externals": "^3.0.0"
  }
}