Cities have been the nuclei of economic activity since the beginning of civilization. The city, as a system, is expected to provide suitable opportunities for economic as well as social well-being of its residents. The million plus population cities of India are such city systems which offer lucrative employment opportunities to workforce in and around the city. These cities are also responsible for the maximum share of economic output, thus contributing significantly to the GDP as well as having the power to influence the financial well-being of the country. External stimuli like acts of violence, global health scares, etc., have the capacity to disrupt the state of equilibrium in any city in general and these million plus cities in particular. Such external stimuli experienced in form of stresses or negative externalities test the city’s capacity to cope in the short term and adaptation capacity in the long term. This paper is focused on understanding the role of diverse economic activities in increasing the adaptive capacities of cities against external stresses, including black swan events such as COVID-19. The paper relies on qualitative and quantitative analysis of available data for the city of Mumbai to depict the positive impact of employment diversity on overall adaptive capacity. The paper concludes that the presence of diverse economic activities in urban agglomerations can be both a boon and a bane for city resilience, depending on various factors and how they are managed.